Tech Giants Still Seek Acquisitions–At the Right Price

3 Dec - Deal Journal - Deep-pocketed technology giants such as Microsoft and Google plan to continue snapping up companies during the economic downturn, likely benefiting from an ability to drive a hard bargain with even red-hot start-up companies, according to executives speaking at a venture capital conference Tuesday.

At issue is the fairly nebulous way that Silicon Valley’s closely-held start-up companies calculate their own values, absent the input of a larger group of investors in a public market. In more flush times, even small companies with relatively undeveloped businesses often commanded high acquisition prices.

Those days are over, executives said during a presentation at the AlwaysOn Venture Summit. Microsoft Corporate Vice President Dan’l Lewin said that while the Redmond, Wash., software giant’s appetite for acquisitions hasn’t waned, its willingness to entertain high valuations has. “The negotiations on valuation might be difficult, but we’re not going to stay away because of the economic climate,” Lewin said.

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