How Sony Corp (ADR) (SNE) Edged RealNetworks Inc (RNWK) Out of a Sweet Deal

In a behind the scene reflection, Josh Felser, who co-founded Grouper that went on to become Crackle, recently revealed Sony Corp (ADR) (NYSE:SNE)’s appetite for promising startups. With a different of $15 million over a rival’s offer, Sony managed to bring Grouper/Crackle under its wings. So far has been so good for the Japanese electronics company.

Felser is billed as a successful entrepreneur. He has founded a number of startups and also invests in the same. His passion is in startups, the environment, and music. Freestyle is an early-stage venture firm that he co-founded.

A startup that won the love of Sony

Regarding the issue of Crackle, Felser looked back several years ago and made a revelation. He disclosed how they built a startup that eventually won the heart of established companies such as Sony Corp (ADR) (NYSE:SNE) and RealNetworks Inc (NASDAQ:RNWK).

When Felser and Samuel Dave, the lead co-founders of Grouper eventually decided to sell the startup, both Sony and RealNetworks expressed interest. It was RealNetworks that first sought a meeting with the duo to discuss the sale of Grouper. However, midway the meeting with RealNetworks, a Sony executive called in to inquire about a proposal Sony had earlier made to Felser and Samuel Dave regarding Grouper.

In its proposal, Sony Corp (ADR) (NYSE:SNE) sought a partnership with Grouper. However, when Sony made a follow up call, Felser informed them that they were in talks to sell Grouper. Although Sony was shocked because Felser and his team had earlier said they didn’t intend to sell the startup, Sony inquired whether Grouper was open for another offer, of course, from Sony.

$65 billion Sony offer

RealNetworks, under Rob Glaser as the CEO, offered to acquire Grouper for $50 million. Of course, Felser and Dave had determined that a purchase offer of $55 million and above wasn’t bad enough for them. Therefore, when Sony Corp (ADR) (NYSE:SNE) placed a rival offer of $65 million, it edged RealNetworks out of a possible deal with Grouper. At Sony Corp (ADR) (NYSE:SNE), Grouper was renamed Crackle.

According to Felser, they may have possibly attracted a better deal, about $1 billion from Google Inc (NASDAQ:GOOGL) if they waited a little longer. Google acquired YouTube, a rival of Grouper, for about $1.65 billion just after Felser sold their startup to Sony.