Xobni’s walk out from Microsoft deal : Smart Decision or..?

If you have noticed all the big acquisitions that has happened in the last few years, most of the acquired products lost their mojo post-acquisition.

Take Google’s acquisitions for instance – they acquired Blogger, Keyhole, Jotspot, Trendalyzer, Tonic, Jaiku, FeedBurner etc; and except youtube, all of these acquisitions have ended up as a small feature in the entire product suite – stripped of all novelty and attention they deserved.

And that’s why Xobni decided to walk out of Microsoft’s ~$20mn acquisition deal – in the fear of being obscured by MS cloud!

But the deeper that Xobni got into the discussions, the less comfortable it felt about its eventual fate inside the Microsoft machine. The fear was that Xobni would end up nothing more than a feature of Outlook. Microsoft wanted the entire team to move up to Redmond, and was vague in its answers about what it had planned for that team, or the product. In the end, the body language just wasn’t there. [TC]

I believe this is a classic dilemma any startup faces – i.e. soak all energy and cross the chasm (if you are lucky, get there or burn out) or just get acquired and end up in spasm!

Xobni, if acquired by MS will end up being just an outlook plugin – and at the same time, lose (in all probability) an opportunity to build plugins for other email clients.

What do you think is the tradeoff of such decision – Immediate success vs. Long term struggle?

BTW – Xobni is the opp. of Inbox – isn’t that ultra cool?

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