Technology-focused acquisitions are an important complement to the firm's internal product development efforts. There is considerable heterogeneity when comparing individual technology-focused acquisitions - especially with respect to acquisition timing and the deal value.

To resolve some of this heterogeneity the author introduces the novel distinction between performance- and functionality-focused acquisitions. He characterizes this distinction based on a theoretical analysis, a qualitative study, and turns to a sample of acquisitions in the field of artificial intelligence for...