Alex Barnett blog


Getting the Microsoft / TellMe deal done

Following yesterday's confirmation that TellMe Networks will be acquired by Microsoft, this morning I read an article by Ina Fried based on an interview with the Mike McCue CEO of TellMe, an ex-Netscape exec (via Dan Farber).

I'm highlighting this because the article provides some insight into how some of these kinds of deals are done and communicates a little of the excitement that comes along with them.

In this case, Steve Ballmer was apparently very hands-on in the forming and validation of the deal, spending Super Bowl Sunday in a conference room in building 34 next to Ballmer's office (across the path of my own in building 35) with a bunch of Microsoft and TellMe execs:

"The day before the Super Bowl, executives for Microsoft and Tellme including Ballmer and McCue, spent most of the day talking. But Ballmer, clearly looking for more details, called McCue at 11:30 a.m. on Super Bowl Sunday asking for another go around. As quick as they could, McCue and his team left the posh Hotel 1000 in downtown Seattle, ran to their Ford rental car and sped across the Lake Washington bridge toward Redmond, Wash."

Wow. The TellMe execs hearts must have been racing! Could you imagine the conversation between them in the car?...And the adrenalin rush that comes knowing you're about to get grilled, in a good way (you hope). Once there, Ballmer drove the number crunching:

"Ballmer peppered Tellme executives with questions about their business, entering the answers into an Excel spreadsheet he had started from scratch.

Three-and-a-half hours later he had built a complete business model, and one thing was clear: an acquisition made a lot of sense."

That was Feb 4. According to McCue, the deeper validation then began:

"By the time the executives left the conference room that evening, they knew they were on to something.

"We had already been talking to Microsoft across multiple areas, but this is really when it started to really come together," McCue said. "It became clear this was a serious opportunity for both companies. The next few weeks were largely spent making sure those intuitions--and the numbers on Ballmer's spreadsheet--checked out."

About five weeks after that meeting, the deal closed.

I really love this story. It reminds me of the deal cut five years ago with my previous company (now part of IBM) and the emotional ride involved: the satisfaction in the validation of the value of a company you've spent huge amount of energy in building; the natural concern that a random bombshell might kill the deal; then magic of realizing a very real payoff on the risks and sacrifices involved along the way in chasing a dream; and the excitement of moving a business into a new phase of its life. Great stuff. Congratulations to the TellMe team.

Posted: Mar 15 2007, 08:43 AM by alexbarnett | with no comments
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