How buyouts by big tech stifle innovation1 min read . Updated: 22 Jul 2020, 09:09 AM IST
Acquisitions by tech giants such as Facebook and Google shrink the valuation of start-ups and take away their incentive to innovate, new study finds
Earlier this month, Google announced that it had picked up a 7.7% stake in Reliance’s Jio Platforms, weeks after a similar deal by Facebook. Given that both the tech giants have a history of buying stakes in other firms, the phenomenon is not new. However, such big deals may not really help the digital platforms sector: a new study suggests that they tend to create a “kill-zone" that drives out startups’ incentive to innovate.
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