Adify announced yesterday that it was acquired by Cox Enterprises for $300 million. It's a great acquisition by Cox because it allows them to control technology that allows clients to create their own vertical ad networks. More importantly it highlights the strategy of partnering with a potential acquirer. Apparently Adify was in discussions to do a partnership deal with Cox for some time. Then Cox decided to lead an investment round and then changed its mind to go ahead and acquire the company. Reportedly, the early backers such as USVP and Venrock have made a nice exit in their 3 year investment.
I've previously mentioned how important it is to choose your investors wisely. It's also important to watch who you partner with. A good investor or partner may just become your big ticket to liquidity. If you align yourself with the right partner or investor you open yourself up to be a nice target to the sphere of influence of that company. On the other hand, choosing the wrong partnership might draw a line in the sand with that partner's competitors.
An example of this is Jajah's recent deal with Yahoo to provide VOIP to the Yahoo network. It's a huge win for Jajah and potentially opens up the door for Yahoo to acquire them. However, aligning with Yahoo can virtually guarantee that Jajah won't be getting business from Google. Interestingly, the Yahoo deal was apparently inked with the help of Jajah's main backer Deutsch Telekom, who Yahoo already has a relationship with.
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