The Wall Street Journal recently noted that “Companies are using fewer advisers for mergers and acquisitions than at any point since 2001, as they look to cut costs amid the downturn…”   It saves money, sure, but it also is more likely to surface acquisition candidates that are better known to the company.

It makes sense to stick closer to home, taking a classic strategic acquisition approach.  No need to throw long passes when the price of failure is heightened by economic uncertainty.   Cynics can argue that this follows an historical 20-or-so-year cycle that moves between this view and a “buy what you can” ethos.  That’s OK.  But it is clear that even if strategic acquisition — to more deeply serve the existing customers or fill a gap in products and services — is back in vogue, it is different, too.

The difference can be seen in the way we measure the benefits of any combination.  More than building deeper relationships with existing customers (as is the likely intent of the Oracle acquisition of Sun) or improving “vendor” relationships (hoped for in the deal between Microsoft and Publicis for Razorfish) or adding a new feature to an already strong platform (said to be behind the IBM deal for SPSS), what will determine the ultimate value of the deals is whether the market first believes and then sees that the new company can deliver.

Right now customers don’t trust many companies.  The ones they do trust are those that have a reputation for persistently meeting customers’ expectations.  Acquisitions made by that kind of company have the best chance to succeed quickly and over time.

Next Fifteen, a UK-based communications holding company, is one such trusted company.  When it bought New York-based M Booth & Associates to “build a global consumer agency,” it was not the companies’ people or intellectual capital or relationships as much as it was the market credibility of Next Fifteen, the acquirer, that signaled its likely success.  The expectation will give Next Fifteen more time to make it work, too.

Consider this reaction against the likelihood that the Oracle/Sun deal will yield customer benefits.  Or whether Microsoft and Publicis will be able to share Razorfish.  And if IBM will be able to create the smart analytics system it desires.    The answers are tied tightly to the market credibility of the acquiring companies.

Right now, I have one “yes,” one “no” and one “maybe.”

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