Dmarc's $1.2B Deal Structure

David Friedberg shares a story about a complex acquisition deal he worked on at Google involving a radio advertising technology company.

"I worked on acquiring this company that had servers in radio stations where DJs would play ads from. These guys had bought the company for $4 million and connected the servers to the internet, allowing advertisers to remotely create dynamic content and fill unsold ad spots.

They wanted to sell the business to us for $100 million - they thought it was worth a billion. The negotiation was crazy. We ended up structuring it as a $72 million upfront cash payment, a $50 million milestone payment for technical achievements, and up to $1.2 billion in earnouts based on advertising revenue from the stations.

I didn't want to do the deal and told Eric Schmidt I didn't think these guys would work out for us. But Eric said 'we have to be in radio, it's a $60 billion market' and pushed the whole thing through despite my resistance.

Sure enough, we ended up in a nasty lawsuit that lasted for years. I wasn't around for all of it, but eventually it all went away and audio ads kind of died down."