When Acquiring, Think Number One

Publishers on an acquisition spree should take note from Oracle’s CEO Larry Ellison.

A February 6, 2008 Wall Street Journal compares the style of Ellison with the more convoluted approach taken by Microsoft’s Steve Ballmer as the latter’s firm attempts to acquire Yahoo. Publishers can learn much from Ellison’s simple mantra for growth via acquisition:

Mr. Ellison has explained his deals in language a third-grader could understand. “We want to be No. 1 in all the segments. This isn’t vanity. The No. 1 software company in every segment makes all the money… We never buy anything where it doesn’t put us in the No. 1 position or gets us in such a strong No. 2 position that we think we can get to No. 1 very quickly.”

Hard-charging bank bosses talk like that. So do the CEOs who run hotel chains, aluminum mills, and breweries…. pursuit of dominant market shares are widely accepted in aging, slow-growth industries.

The key phrase here is “aging, slow-growth industries.” As the automotive magazine business consolidates, many opportunities are available for publishers to grow through acquisition. But don’t acquire from the rear-view mirror because a deal is cheap or for the accolades. Acquire looking ahead and pay what it takes to achieve your goals. A great acquisition not only makes you Number One, it creates value beyond the two combined entities: 1 + 1 = 3.

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