Both those companies (TFSM and NETG) seem to have high valuations making dilution a real barrier to acquisition. Also, is it really worth such a price just to acquire some clients? Both those companies are losing lots of money and so DCLK's bottom line would be seriously hurt for years to come.
Most net companies have used acquisitions to acquire new technologies and services, rather than developing them in-house. For the past two years, for example, no portal has acquired another. The last case of this happening was Excite's acquisition of WebCrawler light years ago in time and space. In contrast, YHOO, XCIT, LCOS and others have acquired content (Wired Digital), Shopping Agents (Jango, Junglee), Calendar services, etc. that bolster their technologies and services.
As for your question, DCLK's share price would drop in the event of any acquisition unless future synergy seems worth the price. For example, ATHM's acquisition of XCIT spurred share prices of both companies on broadband speculation. It is difficult to conceive of such a synergy between an advertising company and another net company.
Hope this helps.
-Sanjay |
