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passive_fist comments on March 2015 Media Thread - Less Wrong Discussion
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Yes that's indeed a big part of it, and there are other issues to consider as well:
smallCo's product may be directly competing against a product that BigCorp has invested a lot of money in; pursuing smallCo's product seriously could imply abandoning that large investment.
By taking over the product and having it fail, BigCorp can try to make it look as if the product was destined to fail all along, justifying to investors why it wasn't the first to produce that product.