37signals with a great summary of what happened after Yahoo acquired many of the successful early 2000s startups.
Whether it’s Flickr, Delicious, MyBlogLog, or Upcoming, the post-purchase story is a similar one. Both sides talk about all the wonderful things they will do together. Then reality sets in. They get bogged down trying to overcome integration obstacles, endless meetings, and stifling bureaucracy. The products slow down or stop moving forward entirely. Once they hit the two-year mark and are free to leave, the founders take off. The sites are left to flounder or ride into the sunset. And customers are left holding the bag.
As they summarize:
All totaled, Yahoo spent $61M on these four companies…How many can be described as success stories? … Is this the future fate faced by most acquired tech companies? Is the cash worth it to founders who have to watch their creations slowly decline into obsolescence? Is freedom better than building and honing a big, popular product? When a company is bought, does it deserve acquisition congratulations or condolences?