Mark Wolfram, General Manager of Venture Integration (!?) for Microsoft, told a group of VCs that no startup is too small for it to consider acquiring, apparently displaying its desire to keep up with Google's and Yahoo's appetites for startup veal. As CNET's own Beyond Binary reports, though, depending on how you read his comment, Wolfram's idea of a fair price may not endear him to too many startups.
"At end of day we are buying a company for (its) people and IP."...
Asked what is the smallest acquisition he'd consider, Wolfram insisted that there is no minimum revenue, provided its two prior conditions are met. Some of Microsoft's acquisitions have been companies with just a few people and no revenue. The company has also spent as much as $6 billion, with its recent acquisition of Aquantive, though $50 million and 50 to 100 employees tends to be the company's sweet spot, Wolfram said.
I read that to mean $50 million in revenue. But if it means what Valleywag interpreted it to mean - 50 to 100 people and a valuation of $50 million, it's no wonder the best startups don't necessarily fall into Microsoft's lap. If I have 100 people in my company I'd darn well better be doing more in revenue than would justify a paltry $50 million valuation.
I think Wolfram must have meant $50 million in revenue. Picking up 50 to 100 people with that kind of revenue is a good acquisition, but will command a fairly hefty valuation. Consider that Zimbra was acquired for $350 million on $6 million in 2006 sales and $20 million in 2007 sales (projected), or that JBoss was picked up for $350 million on $27 million in sales.
Anyway, it's good that Microsoft is engaging with the startup community. It remains far too aloof up in Redmond sometimes for its own good. The company would do well to continue to make itself permeable through open communities, acquisition of startup talent, etc.