[ndl]

My first hypothesis is that it's a question of comparative opportunity cost, rather than absolute cost.

When a company gets very large, it usually struggles to keep innovating under inertia. Trying to build in completely new directions becomes both necessary and difficult. Buying a startup is often cheap compared to trying to fork an existing team to build new things. Furthermore, the startup's business model is already partially proven by time of acquisition - so they are buying some certainty compared to assigning a team to generate new ideas.

Another hypothesis is that with the resources of a large company behind it, the startup may grow very fast. Adobe seems to be good at this. Other companies don't seem as good at managing post-acquisition.

I have never been in or acquired by a large company, however, so what I say should come with a grain of salt.