The answer is: None of them were created by the companies who now own them. They were acquisitions.

These products have continued to develop at their new homes, but the seed of innovation that sparked an actual, new product came from the outside. The key word here is innovation.

Sometimes you wonder how much big companies really innovate. A significant amount of today’s most popular and successful products originated with smaller companies which were later gobbled up by one of the big players (Google, Microsoft, Yahoo, IBM, Oracle, etc).

We’d like to call this phenomenon “innovation by acquisition.”


Examples of innovation by acquisition

Here below is a small sample of well-known, successful products that began their lives outside the very big companies who now own them:

• Flash – was Macromedia’s product before Adobe bought Macromedia in 2005.
• Dreamweaver – was Macromedia Dreamweaver.
• Adsense – came out of technology from Applied Semantics, which Google bought in 2003. Adwords, Google’s other big money maker, is also based on an idea from outside Google, although that company (Idealab) didn’t want to sell it, so Google went ahead and created their own version regardless and settled the IP issues in court.
• Google Analytics – was Urchin, until Google bought Urchin Software.
• Blogger – was created by Pyra Labs, which Google bought in 2003.
• Google Docs – the word processor in Google Docs came from Writely, an app created by Upstartle which Google bought in 2006. Google Spreadsheets, another part of Google Docs, originated from technology bought from a company called 2Web Technologies.
• Android – Google’s Android OS began life at Android Inc., a company Google bought in 2005.
• Hotmail – was bought by Microsoft in 1997.
• Powerpoint – came out of Forethought, a company Microsoft bought in 1987 (its first acquisition ever).
• Visio – was its own company before Microsoft bought it in 2000.

There are plenty of other prominent examples. How about Postini (bought by Google), YouTube (bought by Google), Feedburner (bought by Google), Flickr (bought by Yahoo), Delicious.com (bought by Yahoo), and we could just keep going.

We picked these examples because they are widely known products by big, well-known companies. However, look at any really big company within any industry and you are likely to find examples of innovation by acquisition.

That said, some companies are more aggressive than others when it comes to acquisitions. Google comes to mind here. Within the last two weeks, Google has bought Picnik, an online photo-editing application, and DocVerse, an online document collaboration service. Expand your lasso to include a full month, and you can add another two companies (Aardvark and reMail).

Actually, since its IPO in 2004, Google has been on such a spending spree that entrepreneurs often jokingly (or not) refer to “getting bought by Google” as an excellent exit strategy and business plan.


The challenge of in-house innovation

These big companies have resources aplenty. For example, Google has more than 7,000 people in research and development. Microsoft has even more. That’s a huge amount of brain power if channeled effectively. So why don’t we see innovation in proportion to those numbers? They should be innovation powerhouses.

One problem for big companies is that they are saddled with a lot of inertia and overhead. They have plenty of money, but they are simply not agile anymore. Smaller outfits can be flexible and quick, because they don’t have an existing corporate infrastructure to maintain. Ideas can flow unhindered.

This is for example what Google wants to simulate with its famous 20% time. Interestingly, they seem to have gained some success with it, because according to Google, 50% of their products come out of projects started this way. (For an interesting perspective, check out this article by Scott Berkun about Google’s 20% time.)

We’re sure that many other companies have similar, if perhaps not quite as drastic, ways of encouraging in-house innovation. But innovation also needs to be recognized, and if you have a huge corporate infrastructure and thousands of employees, things tend to get lost in the shuffle.

Another dilemma is that big companies with a lot of existing products often need to spend a significant amount of effort and resources on the continued development and maintenance of those products. This backlog of products is paying the bills, so they are important. This is a problem (or luxury) that startups don’t have; instead they can spend all their energy on that new, exciting product. They don’t need to maintain the status quo.


The upside of acquisitions

There are of course upsides to innovating by acquisition. If you can throw money at a problem to solve it quickly, or explore an opportunity, this can be very effective. And big companies usually have money in droves, just waiting to be invested.

• If it’s a market you want to enter, by entering it via acquisition you have one less competitor to worry about (because you own it).
• You get an immediate influx of expertise.
• By starting with an existing product you get a head start on the application development or get access to well-developed technology.
• In these days of patents and lawsuits, many companies also have another valuable asset: IP.
• In many cases, by buying an existing product you get access to its customer base. This can sometimes be worth more than the product itself.

Final words

Acquisitions are in no way inherently bad or evil. It’s just a different way of accomplishing a goal. Still, you can’t help but be fascinated when you look at some of the more acquisition-happy companies and realize that a huge part of their product portfolio originates from outside the company.

On the other hand, they should get two thumbs up for recognizing the potential of the companies they bought.


[pingdom]

Oh, Fall Fashion Week. While the exclusive invite lists, overwhelming crowds and Bryant Park traffic can be irritating to those not on the A-list, we deal. Because, for people who covet the cloth, Fashion Week is the big reveal: a taste of the creative genius of some of today's top fashion minds and the fuel for our own style inspirations. For most of us, scouring fashion blogs or scanning through Style.com's runway photos does the job, but there's certainly room for improvement. So, this season, designers decided to utilize some of today's hottest technologies to give stylephiles a more immersive runway experience:  3-D:   On its journey from movie theatres to home theatres, 3-D technology made a pit stop on the runway. The creative minds at Burberry Prorsum must have had Avatar on the brain when they thought of throwing red and blue glasses into the mix. Giving exclusive invitees outside the London area a more eye-catching perspective, the Burberry Prorsum show was streamed live in 3-D at specially designed viewing venues in Dubai, Tokyo, Paris and New York. (LA fashionistas got a tape-delayed version.) And while the novelty of the 3-D runway show got the media buzzing, it was the instantaneous online pre-selling of the runway items - available for three days only - that captured the hearts and minds of those not included on the guest list.

QR Codes: From wine labels to book covers to business cards, the QR code is becoming a marketing must-have. Taking advantage of these nifty little symbols is fashion designer Norma Kamali. Foregoing the standard runway presentation, pieces from and photographs of Kamali's Fall 2010 line were, for a limited time, on display in her store for anyone to view. After downloading a free app from ScanLife Mobile Technology onto their smartphones, visitors could scan QR codes which accompanied the displays to access videos, images, press clips, and other bits of behind-the-scenes information. Items from each of her lines, including the budget friendly NK for Walmart and eBay collections as well as the higher priced OMO collection, were featured. And unlike the typical runway show, every item was immediately available for purchase.

Live Mobile Streaming: Whether you're in the corner coffee shop or the corner cubicle, the ability to catch live streams of events online is just a click away. But what if you're riding on a crosstown bus? Or stuck in the waiting room of the doctor's office? Dolce & Gabbana took the live stream one step closer to fans by streaming both the D&G and Dolce & Gabbana shows directly to several different smartphones, including the iPhone and the Droid. For those stuck at the computer, the shows were also streamed live on the Dolce & Gabbana Facebook page. Too bad Gilt didn't have a haul of D&G to push later that day.

[trendcentral]

We all know that young folks use the social Web for personal purposes, from keeping tabs on family members to sharing party pics with friends. And yes, as we reported more than a year ago, they even use the social Web - gasp! - while at their places of employment. But they're also using more tech for work-related tasks, including interacting with customers and vendors and forming or strengthening new and existing partnerships.

According to a 5,595-person, 13-country survey from tech consultancy Accenture, since this generation has grown up with daily doses of technology in one form or another, "They don't see bright lines between work
and personal, virtual and physical, sanctioned and prohibited. It's not, 'Would you approve this, boss?' but, 'Whatever gets the job done.'"

Millenials may not be completely aware of their company's IT policies, including those on social media use. For example, only 40 percent of U.S. citizens ages 14-27 know what their company's IT policy is. That percentage dips to 38 percent in the U.K., 36 percent in Australia and a laid-back 25 percent in France. And even if millenials are aware of these policies, many choose to ignore them and bypass restrictions.

IT managers often see these behaviors as weaknesses - loopholes that allow for security breaches and loss of productivity due to distractions and heavy multitasking. But they might also be allowing millenials to work smarter, not harder.

For example, more young people are using real-time communication methods such as IM, thus reducing the amount of time checking email and waiting for an asynchronous response. In fact, 10 percent of respondents said supervisors used SMS and chat to communicate with them, and 20 percent more said they wished their bosses would use these media more.

Web apps are also gaining favor in the young workplace. Around 75 percent of respondents said they used online collaboration tools and applications for work purposes; many of these millenials also thought that workplaces should be improving their use of emerging technologies. "Globally," states the report, "about one-half of millennials have accessed online collaborative tools, online applications and open-source technologies from free public websites when those technologies are not available at work or when the versions offered at work don't meet millennials' expectations."

Young people's expectations are also high when it comes to selecting their next employer. Not only did 37 percent of respondents say they want to see state-of-the-art technology being used in their prospective workplace; just as recruiters and hiring managers often snoop around search and social sites to investigate a potential hire's character, the millenial job-hunter will check up on prospective companies, peers and bosses, as well.

To hear some respondents explaining their attitudes and behaviors in their own words, check out this video from Accenture:

Although these attitudes and work styles can clash with older managers' expectations, they can also provide great benefits to a workplace and team. "Millennials are more intimate with technology than any previous generation," the report states. "Even high school interns can now add value. Companies that figure out how to tap younger workers' tech savvy and listen to their ideas in a productive way will likely enjoy an increasingly strong innovation-based competitive advantage.


"Listen and learn. Millenials are a resource to be tapped, not a problem to be solved.:

What do you think of these results? Do they line up with your experiences using tech in the workplace and the attitudes and behaviors of your colleagues? Let us know in the comments.

[readwriteweb]

On Wednesday, I wrote about a battle looming between Apple and Google as discussions take place over the possibility of Apple making Microsoft’s Bing the default search engine on the iPhone.

Stepping back further than a single search engine fight, it’s evident that Google, Microsoft, Apple, and even Yahoo are now competing in numerous different business arenas.

The chart above illustrates many of the services these companies provide. Some of their products have been cornerstone revenue streams, and others are just at the beginning of development. But putting them up against each other really helps illustrate each company’s focus and their possible future directions of exploration.


Google

Although the company started in search and made billions of dollars in search-related advertising, it recently made the move into mobile software and hardware. Google is also moving to the desktop as hardware companies consider using Google’s Android operating system for tablet PCs and netbooks and Google continues developing its own Chrome OS. Google’s recent foray into mobile phones, with the Nexus One, signals a big shift for the company, but the lack of customer service might hinder customer adoption of its mobile products.


Microsoft

Microsoft really competes with everyone. It is on the desktop, in the cloud, on mobile devices, in your living room, answering search queries and navigating you to your favorite restaurant. So what’s next? Although the company invested in Facebook, and it offers some social features on its Xbox platform, it still needs to make a major leap into social networking. Another major gap is mobile phone hardware.


Apple

Apple’s success with Mac personal computers, the iPod, the iPhone and iTunes has allowed it to step back from the fray and avoid competing in search, news, maps and social networks. But the recent competition with Google over mobile phone software might change its attitude. Apple has close to $34 billion in cash and securities, which means that it can afford to make some big purchases in the search market — or any other market for that matter.

A side note: While looking at the comparisons of these four companies, it’s especially interesting to see that Apple is the only one of the four that charges for its online services, including calendar, contact sync and Web mail. Google, Microsoft and Yahoo all provide these cloud-based products free of charge.


Yahoo

Yahoo has not really added any new products or services over the last year, but it seems to do best with content-related products. Yahoo News is still the No. 1 news site, and Flickr continues to grow and remain a highly successful photo Web site. As the race really pushes toward mobile over the next few years, it’s going to be interesting to see how Yahoo decides to play in that space.


[nytbits]