Mar 3, 2003


egurucool's acquisition by NIIT

I think the reasons given are very cogent. However, the acquisition
is also the vehicle by which bigger firms try to gain competenices
in the new emerging area that the younger nimbler firm has gained
sustainable competencies in.

I know people like Tom Peters are very anti-acquisitions, terming
them the 'mating of the dinosaurs' ...but i think that looks at the
picture from point of view when two giants merge (AOL Time Warner
looks bad now!)

But the strategy of a bigger giant acquiring smaller firms has been
perfected by firms like Cisco to constantly keep themselves on the
cutting edge of technology (bad pun!)

This strategy can work only when the acquiring firm has the maturity
to absorb the culture change that it brings and give the space to
the new technology to flower. Additionally it gives the smaller firm
the access to the networks, processes and customer base of the
larger firm.

In this case , prima facie, it looks like NIIT has obtained a good
acquisition. It gives it the base of e-gurucool and synergise it
with its own K-12 business. The approach of egurucool was individual
students while K-12 addressed state education bodies for IT'fication.

Till we can look back at this in hindsight :-)