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When the broker houses merger resulted in the acquiring firm paying a premium on the order of $100 for each of the acquired firm's customers

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When the broker houses merger resulted in the acquiring firm paying a premium on the order of $100 for each of the acquired firm's customers during the dot-com era, the business rationale suggested that there are important direct network externalities existed to acquire situation. The brokerage houses are expecting that they will expand their own network by increasing the brokering business to making the deals and profits. This situation can be explained that when new company joining the network and the potential to increase the network is high by referring to others, it will increase the brokering business to multiple thousands of dollars. Therefore, there is a business rationale for this situation when each customer received $100 from the acquired firm (Baye 8: Prince, 2017)

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