Monday, August 18, 2014

In Silicon Valley, Mergers Must Meet the Toothbrush Test - NYTimes.com

Acquire different

"When deciding whether Google should spend millions or even billions of dollars in acquiring a new company, its chief executive, Larry Page, asks whether the acquisition passes the toothbrush test: Is it something you will use once or twice a day, and does it make your life better?

The esoteric criterion shuns traditional measures of valuing a company like earnings, discounted cash flow or even sales. Instead, Mr. Page is looking for usefulness above profitability, and long-term potential over near-term financial gain."
In Silicon Valley, Mergers Must Meet the Toothbrush Test - NYTimes.com
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