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Spend & Save

Donald MacInnes: Pay $750,000 for Google? You must be joking...


Last week I presented you with a lovingly conceived, hand-crafted essay dealing with what I regarded as being the best deal ever struck in business - the one which saw snot-nosed up-and-coming director George Lucas refuse a handsome salary to direct Star Wars, in return for the merchandising rights and total control over any future sequels. Although 20th Century Fox has made a geyser of cash from the space film, Lucas walked away with some $7.3bn (£4.5bn), most of which would have gone into the studio's savings account had it not been done up like a kipper by Lucas.

By definition, of course, there are going to be more stories about shockingly wrong business decisions than ones about far-sighted success. The one often trotted out concerns the man who turned down The Beatles, Dick Rowe of Decca Records. Yes, his proclamation to the Fabs' manager that "guitar groups are on their way out, Mr. Epstein," meant he lost out on being knee-deep in gold ingots for the rest of his life. But what is less known is that shortly after his Merseybeat mistake Rowe found redemption by signing The Rolling Stones. So failure is relative.

But sometimes failure is just failure and, remaining at the bottom end of the "sweet deal" scale, it's worth focusing on a squandered opportunity that makes Dick Rowe look like Gordon Gekko.

Surely the Crown of Terrible Decisions must sit on the pate of George Bell, the CEO of internet portal/search engine Excite which, back in 1999, had the opportunity to buy Google for $750,000 and turned it down. At the time, bearing in mind that the internet was still new to many, Excite was a seriously major player, far above Google.

At the wheel of that search engine were Larry Page and Sergei Brin and the two had had to come to terms with the fact that Excite was still the go-to portal, even though Google was regarded by many as the superior operator. Disillusioned and keen to get back to doing pure research, the two eggheads offered their business to Excite for $1m. No deal. They dropped their price to $750,000, but Bell refused. That's $750,000. For Google. Which is now worth $250bn. Nope.

What makes things more wince-inducing is that some years later Excite suffered a major decline and was bought by AskJeeves.com.