The MicroISV Show on Channel 9 team interviewed me earlier this week. The interview covered what we do at Microsoft's Emerging Business Team, how we work with VCs and startups, how Microsoft does acquisitions, the kinds of companies we look for, and how the VC investment climate has changed. Here is a link to the interview.

On an airplane you can plug your headset in and listen to the pilot talking on channel 9. That is the idea behind Channel 9, it is your direct connection to the cockpit at Microsoft.

In the interview we talk about how to build a partnership with Microsoft, and how the Emerging Business Team helps small startups get plugged into partner programs at Microsoft. We have a website for startups called Microsoft StartupZone where you can find information about all the programs we offer, and how to connect directly with the right business development person at Microsoft.

Microsoft acquired 14 companies in 2005 and another 19 companies in 2006. At Microsoft we try to find the best startups early in the game and acquire them for reasonable prices. The average acquisition price was around $30M. There were some that were significantly more than that, but on average we try to stay in our sweet spot.

I have heard Steve Ballmer say that he would rather acquire 40 companies for $25M than acquire one company for $1 Billion. The first reason is that it is easier to find synergies and leverage in a small company than in a large billion dollar company. The second reason is that you spread your risk with 40 small companies versus putting all your chips on one big company. In the interview I talk about some of the companies we have acquired and why we did it.

Check out the interview on Channel 9 and see Microsoft StartupZone for more information.