[nostrademons]

There are two parts to getting good employees: finding them and getting them to work for you. Many startup employees, by themselves, will not work for Yahoo for $200K/year. Many startup employees will work for Yahoo for $150K/year if all their favorite coworkers are working for Yahoo and they get to work on a product they're familiar with. The only way to bring them over is to bring them over as a block.

Many people in the startup world don't understand this, but the vast majority of people in the labor force are not primarily motivated by money. You need to pay them enough to feel like they're not being taken advantage of, but beyond that, they go for work environment, interesting coworkers, challenging projects, and other intangibles. To have any chance at all of hiring them, you need to provide those and not just money.

(Google understands this very well - they explicitly state with their offer that most people who work for Google do not do so for financial gain. They do it because they want to be a part of something great, and have really intelligent coworkers, and be given a flexible and creative work environment. Yahoo has a big challenge matching this, given their current lackluster stable of products, and Marissa's trying to jump-start the virtuous cycle and bring in folks that people would want to work with.)

[badclient]

There are two parts to getting good employees: finding them and getting them to work for you. Many startup employees, by themselves, will not work for Yahoo for $200K/year. Many startup employees will work for Yahoo for $150K/year if all their favorite coworkers are working for Yahoo and they get to work on a product they're familiar with. The only way to bring them over is to bring them over as a block.

False dichotomy if there ever was one.

[stevenwei]

Many startup employees will work for Yahoo for $150K/year if all their favorite coworkers are working for Yahoo and they get to work on a product they're familiar with.

That seems at odds with the fact that most of these companies products are immediately shut down when the acquisition is announced.

[nostrademons]

Shutting down the product is often not part of the deal. Many founders will deliberately choose an acquirer that offers less money but promises to keep the product alive.

It's often a bait-and-switch tactic on the part of the acquirer. Once the deal is complete, the acquirer owns everything, product and all, and has no legal obligation to keep it open and active. If you wait a month or two after the deal closes to announce this, then many of the employees already have large sunk costs in the employer - they've possibly relocated, they've signed up for health insurance again, they don't want to have a tenure of 1-2 months on their resume, they've learned some of the acquirer's systems, they've made contacts in their new employer - and so you can keep them even if it's not a choice they would've made initially.