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I am going to give Yahoo the benefit of the doubt. I have a hard time believing that they'd pay $30M to gain five programmers. There's a lot more to this than we are aware of. C'mon folks, if you think the math doesn't add-up (as an acqui-hire) don't you think the folks at Yahoo can do basic arithmetic as well.

I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.

Here's a bit of news for detractors: Business is hard. No, it is fucking hard. And, at their size and scale it is even harder. And, at the break-neck competitive speed of the internet, even harder still.

Mere humans make mistakes. We can read the tea-leaves wrong and take the wrong road --or one that is less than ideal. In business this can cost you years before you regain your prior position. What matters is that you do not give up.

I like Yahoo very much. They've been around for a long time and hopefully they'll be around a lot longer. They might eventually find a groove to fall into and light-up the afterburners. Stupid they are not. What they are doing is hard. What all of us are doing is hard, at any scale.

I have a hard time believing that they'd pay $30M to gain five programmers.

That's a fairly standard acq-hire, actually. It's not just Yahoo that's paying over $5 million per head. It's ridiculous, when you consider that the value of an employment relationship (which can be ended by either party at any time) is set at 30-60 times the annual salary. (Just think about it: how is a relationship that lasts 4.5 years on average worth 50x salary?) As I said, either engineers are getting screwed, or acq-hires are signs of severe desperation and devastating information poverty. It seems to be both.

I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.

I am dead sure that there are a lot of amazing engineers at Yahoo. It's just sad that the company is so calamitously bad at recognizing talent at the bottom that it has to hire external 17-year-olds. I'm sure they have plenty of great people who'd be thrilled to do an NLP/R&D project for just their regular salary.

If I were at Yahoo right now, after this acq-hire I'd write Marissa Mayer an email:

    Dear Marissa,

    Hi, I'm Michael O. Church. My salary is now $500,000 and I have full autonomy to 
    work on whatever project I want. Based on the rate you are paying for external 
    talent, this salary is justified. I am dead sure I will deliver more 
    economic value to Yahoo than I take from it, but I will choose my projects 
    from here on out. If that is not acceptable to you, Friday is my last day.

If you're writing $30-million acq-hire checks for 17-year-olds, you should fire every goddamn middle manager, because your ability to recognize talent at the bottom is for shit.

It's not even five programmers - according to the news, only the founder and 2 employees are joining Yahoo. This is acquisition is fantastic news for the founder, but I'm still at a loss on how it can possibly be a good business decision for Yahoo.

I don't believe in "publicity" and "getting in the news" and "making Yahoo hip again" - for $30m, you could do much better. I don't really believe it's for talent either - they could have found much bigger and better mobile teams for that money if they wanted to.

The only two hypotheses that seem plausible to me are:

* SRI accidentally granted Summly a too broad and cheap license for their summarisation technology, and it's cheaper than licensing from SRI directly.

* The 17-year-old founder's parent is a Morgan Stanley executive, and the startup has high-profile investors. Some M&A exec at Yahoo went golfing with one of the investors, and decided to help an old friend cash out on his investment. The rest of the deal is just a side effect.

SRI accidentally granted Summly a too broad and cheap license for their summarisation technology, and it's cheaper than licensing from SRI directly.

ding! ding! ding! I think we have a winner here.

This is spot on. I'm certain this 17-year-old is incredibly clever, but you could hire an entire think tank of clever people to do nothing but innovative R&D for $30M. Hell, I'd take a significant pay cut if I could transition from coding around bullshit UI quirks to actually solving real problems.

I'm looking forward to the compilation entitled "How to succeed at Yahoo".

Well, first they'd have to acq-hire me. I'm cheaper than $30 million, though.

I am seriously considering considering going into business as an "unfuck your culture" consultant. If you're at the point where you're paying $6 million per head for talent, then I'm a fucking steal at $2500 per hour [0]. Sure, I will talk your ear off for 200-400 hours over two months and bill you for almost a million, but I will solve your damn problem.

[0] That's my rate for large companies. Startups get a discount. Inquire within.

Without commenting on Yahoo! specifically, I think it's the case that sometimes companies become so dysfunctional they're beyond redemption. One company I worked at used to do contract work for Nortel. At one time it occurred to me: "you know this seems like stuff they could do in house, why are they paying us to do it?" Apparently the institutional bureaucracy was so bad no R&D-type project could get done internally. Of course the company filed for bankruptcy like a year or two later.

"I am seriously considering considering going into business as an "unfuck your culture" consultant."

After only six months and two gigs as a contract software engineer, I'm thinking about this too. So far I'm appalled at the state of play in the small software houses I've seen.

Many years ago I watched a tv documentary (probably BBC with the Open University) about business consultants.

There was a small - medium engineering company. These firms tend to be split between white collar office and management work, and blue collar shop floor work.

The consultant went in, had a bit of a chat with the management, and then went onto the shop floor. After a bit of resistance he got a lot of great information. When someone is sitting at a machine pushing a button for 8 hours a day one thing they know is what makes that harder and what might make it easier.

He got all these suggestions and put together a plan. All the blue collar staff were energised, active, keen to be involved. He then told them he was going to make a presentation to management. He asked the shop-floor workers what they thought would happen.

"They'll ignore you" was the reply. "No!" he said, "They'll see the work we're put in, and they'll see the benefits to them, and they'll put in some changes!"

He called the meeting. He gave his presentation. All the management sat, waiting for someone else to make a first move.

Obviously they did not agree with any of the suggested changes. They heard the story about the car factory worker who saved his company thousands with a simple bag over the licence plate suggestion. They didn't care.

"What you don't seem to realise is that we've already thought about all of this before we put the machines in" - it's like kaizen never existed.

There's a reason many work cultures are fucked.

But, you know, it is a good idea and I wish you luck if you try it!

PS: obviously the point is not "shop floor great, management bad", because I've met many lazy shop floor workers.

What is the story about the car factory worker and the license plate bag? Google is not helping.

If you find a link to that documentary I'd love to see it.

I'd love to watch it again. Unfortunately it was years ago and I keep failing to find it. But if I do I'll post links here.

I hate it when that happens to me! I've had a quick google and nothing jumped out.

Thanks.

These guys seem to have beat you to it: http://shitcreekconsulting.com

Will your company have a yogurt cup for a logo? I'll let you have that idea for $500 - $600.

No, but the Office Olympics will use Yoplait lids for medals.

Given your comment history, and the way you seem to understand the bigger picture, I would not hesitate to go to business with you. So, let's get busy getting acq-hired. (:

Are you in New York? I'm always happy to kick around ideas, and for the next 3 weeks or so I have more time than usual.

No, I'm not in NY. Currently reside in the Caribbean. May you email me? We could, at the least, speak through Skype or telephone.

I'm in NY and would love to tell you about what we are building. Hit me at GMALEKILLA at gmail.

In the case of Yahoo! they already know that it sucks and I am sure acqui-hires is only one part of Marissa's strategy to turn it around.

If it's that easy why don't you do it? Surely a self-proclaimed 1 in a 100 programmer could bang out a product ripe for aquihire in the time it took to write all these "don't care, but still" posts?

I never said that it's easy.

We both know that it's not "easy" to get acq-hired for $30 million. It's also not easy to win the Powerball, even if any idiot has a chance.

It is, however, a sign of something wrong in the economy.

When a $6-million-per-engineer acq-hire (the team, not the product, is being bought) is going down, the company is paying about 50 years of an engineer's salary for an employment relationship. A job lasts, on average, 4.4 years according to BLS. Particulars to acq-hires only make that expected duration lower, but let's use 4.4 because we don't know what the "real number" here is.

Executives bitch until they're blue in the face about paying 25% for a normal recruiter. It seems inconsistent to complain that your headhunter's charging you 25%, then pay 5000% for an HR acquisition.

This means one of two things. The first is that, possibly, the employment relationship is worth that much. That is, it's worth $1.5 million per year (as opposed to the more typically cited figures, which are around $200,000) to employ an engineer. Well, then engineers are getting screwed. They're only getting ~7% of their total value-add (120k / 1620k) instead of 38% (120k / 320k).

The second possibility is that engineers aren't getting screwed, but that companies are so bad at discovering talent internally that the only way the executives and get their hands on someone good is to buy people on the market at a very high price. That's not saying that there aren't good people at a company like Yahoo; only that the middle-management filter is so dysfunctional that executives don't know what they have.

Let's say that in November, you pay $2000, out of desperation, for a new coat that's worth $175. When your lease ends in August and you're cleaning everything out, you find that you had an equally good coat in your apartment, just sitting there all winter. You couldn't spot it before because the place was such a pigsty. You'd feel like an idiot, then, wouldn't you?

That's how executives deserve to feel if they acq-hire talent for $6 million but have capable people within (and I'm sure they must have some) who are being underutilized on trivial features and fourth-quadrant nonsense. If you simply don't have talent, then go ahead and buy it at a high price. If you have it and can't find or use it, then you need to scorched-earth your whole management structure.

You're discounting the multiplicative value of the team.

A lone wolf programmer, even if he/she is an ace, is pretty limited. An entire team - spanning the entire stack from design, backend, frontend, etc, is many times more powerful than its individual constituent employees.

High-performing teams are also extremely rare, and extremely hard to build. It's not hard to build a team that can get its shit together long enough to ship a product. It's really hard to build a team that can ship at the top of the field, consistently, repeatedly.

I don't know enough about Summly to know if this is the case, but if they fit this description, then the acquisition doesn't strike me as completely ludicrous - just a little bit.

Of course, this logic doesn't fly in reality because it's practically a guarantee that the slow, stodgy, MegaCorp that acquired the lean, high-performing startup team is going to stomp all over whatever it was that made them tick. I've seen this happen too many times to believe that there is another possible outcome.

But it seems that every stodgy, slow MegaCorp believes they're different, and this time they'll adopt a hands-off approach and let the team work its magic. Then reality sets in, some middle manager crashes it all while fighting for his/her fiefdom, and the whole exercise is forgotten about until the next acqui-hire.

Anyway, theoretically an engineer can be worth $1.5mm a year if they're in a proven, performing team that's operating a couple of standard deviations above the norm, in a competitive field. That same engineer would be worth far less if they came alone.

Only 2 of the 5 members of the team are joining Yahoo though. That's not a team.

Maybe it's not just about talent, you could certainly hire amazing talent for a lot less than $30 million.

I imagine this kid will disappear into Yahoo and emerge again in 3 years time more mature and having been groomed for a leadership role by Mayer etc.

He will be the "lead developer" for some new product they have spent $serious_R&D_budget on and will make another promotional video where he talks in a charming British accent and drinks cups of tea with Stephen Fry.

In other words "The wonderkid who turned the crusty old dotcom around".

Technology is a celebrity culture and Mayer knows this. Liken to manufactured "boy bands".

I'm an old fart (29) and don't have a British accent, but I'll do the three-year CEO-protege thing for a mere $10 million and kick it's ass (as long as you listen to me; if not, then you're wasting money).

Bidding war's on! (If you say $9.99 million, then you are a fucking asshole.)

If you had the connections that this guy (and Mayer, and Sandberg, and Zuckerberg, and...) has, you wouldn't need to auction yourself. That's how the system prefers to work.

I'll do the three-year CEO-protege thing for $10 million as well, but I'll listen to the payer! Better deal heh?

The listening is obviously a part of the package. Before I can say, "You're doing it wrong" in good conscience, I have to make sure that you are doing wrong.

I know it must seem like I get off on pointing out Wrongness, but there's this thankless and time-consuming process of finding the Wrongness. It's exhausting work. Y'all just see the fun part.

Man, $1 million is more money than I will ever need.

So I'll do it for $3 million. Your move.

See, that's why this 17 year old kid is much smarter than you. He got in before the race to the bottom started!

Did you read the article? In paragraph 4 he specifically tells us he takes the founders age off the table.

I know that the OP did take it off the table. I'm not doing so. It's important, and here's why.

I'm sure he's extremely talented. Most 17-year-olds aren't programming at all. However, this is an HR acquisition (they're shutting Summly down). What exactly does a 17-year-old have that merits a $30m hiring bonus?

I'm not ragging on him, at all. I think it's great for him. He had the opportunity and took it. That's awesome. But... what are Yahoo's executives thinking?

When DE Shaw hires Putnam Fellows, they start them at $150-200k. Not $30 million. They have to work their way up to that.

I'm not asking this out of resentment, because I don't care. Yahoo could have acquired him for $500m and I wouldn't care. I'm asking that out of honest curiosity. If you're that desperate for talent that you're hiring 17-year-olds (very good 17-year-olds, no doubt) with a $30m hiring bonus instead of a much more reasonable, I don't know, $500k, then what did you do so wrong as to get there?

See, I'm sure there are economic reasons for large companies to buy goofy startups for $7 million per engineer. But that's a sign that either (a) they're all seriously underpaying their people, and it's systemic across the Valley, or (b) their internal cultures are so stifling of creativity that they're desperate for innovation, and the only thing they can come up with is to massively overpay "credible" people from the outside instead of developing internal talent.

I suspect that it's both (a) and (b). In fact, I've been inside enough short-sighted, badly-run companies to know that it is.

It's of personal interest to me. Companies are literally in headline-making death throes because they can't get people like me, and when one of us shows up-- we aren't that rare, maybe 1 in ~100 software engineers-- they treat us like shit. It's bizarre.

Here's a proposal to all the large corporations out there. For a mere $2500 per hour I, Michael O. Church, will tell you how to unfuck your inefficient, talent-stifling culture. CEO of a megalith that can't hire good people without a 5-million-per-engineer acq-hire? (Actually, you probably have good people-- some much better than I am-- but the dopey middle managers keep you from seeing their talents. Fire them. That'll be $175.) I will help you change that. All you have to do is listen to me. After 200 hours (that's a mere $500k) you will no longer to acq-hire at $5-10m per engineer to get good teams. You'll be able to do it for $3m per engineer because people will actually want to work for you. Or, better yet, you'll be able to get good people the old-fashioned way.

Mark Zuckerberg is young and rich, but he actually built a free-standing company. So it's not as ridiculous that he's worth billions, given that the work (possibly not the code, but the ongoing business process) is still in use.

It's hard to say this without sounding insulting or belittling, but I'm genuinely curious... What are your credentials? You don't have to justify yourself to some random guy on the internet (me), but a few of your comments mention you're in the "1 in a 100" category, so I'm wondering what you've done that would be so valuable to Yahoo. Is it that you're a talented engineer or more?

I probably sound like a complete dick but I'm being sincere. I often wonder where on the scale I sit (e.g. 10 in 100?), and whether I'm undervaluing myself or my talents, or even whether I'm overvaluing it? So I'm wondering how/why you arrived at your personal valuation. Hope that's not taken the wrong way.

This is a really good question. If you're looking to assess personal software skill, here's where I defined the software scale: http://michaelochurch.wordpress.com/2012/01/26/the-trajector...

It's from 0.0 to 3.0, but the majority of professional software engineers are between 1.0 and 2.0. Average is about 1.1-1.2, and 1.5 is seriously good; it means you're starting to have sound multiplier, infrastructural contributions.

I'm probably at 1.8, which is about 97th percentile. I promoted to "1 in ~100" because I have a lot of creative talents, cultural insight, and design experience. That's just a ballpark. I'm somewhere between 1-in-10 and 1-in-1000 (among software engineers). It's highly subjective and has a lot to do with tool fit, project/person coherence, and peoples' motivations. In some companies, I'm the absolute last guy you want to hire. In others, I'm a 4-sigma catch. Especially at the upper end, it depends a lot more on fit than anything objective.

My point with "1 in ~100" was that, while I won't claim to be average, if you're at Yahoo's size you almost certainly have people who think like me. If you can't find them through normal methods and have to acq-hire to get top talent, that's on you, but I think you're spilling money on the floor. It'd be cheaper, in the long run, to develop what you have internally.

Interesting credentials, but I prefer to rank professional software engineers on the Freyr scale, which ranges from 'Fink Melange' to 'Banana Whelp'. It's a complex system based on myriad factors, and even discounts for spatial-temporal mislocations and organizational dissynergies.

Right now, I'm a 'Piebald Lummox', which places me squarely in the 99.3 percentile. In other words, I command top dollar and you're an idiot if you don't hire me.

If you need any further credentials, I'll tell you about my inverse Graftenberg scale of managerial excellence. I'm currently at -ξ.

Haha, "here's an article I prepared earlier"! Looks like an interesting read, I'll go through it now.

I understand what you mean, given the sample size it's statistically likely that there must be a some number of extraordinarily talented devs. And that they're not nurturing that talent. It is a fair observation I must say.

EDIT: Thanks for not misinterpreting the question

This "strange" deal actually did a few things for Yahoo: - people are talking about it (and not in a bad way, like it was with the telecommuting memo) - this may attract some fresh talent (just out of novelty; before, Yahoo was pretty much written off) - it's crazy enough, it's actually pretty energizing for the right kind of people on the inside

On the other hand, I can only imagine what kind of internal HR issues these acqui-hires may create for Yahoo.

People are talking about it in a bad way. I don't think it's useful to hate or resent a 17-year-old for getting acq-hired (although it's pretty disgusting that he keeps the company of Mark Pincus and Rupert Murdoch; I'll give him till 21 to clean his judgment of character of such) but this reflects really badly on Yahoo.

On the other hand, I can only imagine what kind of internal HR issues these acqui-hires may create for Yahoo.

Well, for fuck's sake yeah.

What Yahoo needs to do, and fast, is get better at discovering talent within. Apparently they have a problem with lazy people. Ok, so make it possible for a not-lazy employee to make a real dent-- important projects, self-direction, lots of autonomy. Give your best people an incentive to bring themselves out and shine. Honestly, if you give your most talented people basic support and autonomy instead of letting them get eaten alive by people they intimidate, you're doing better than 90+ percent of companies.

Any attempt to innovate in corporation is potential career killer. That is how companies work. So many smart engineers are just quiet and they just do what they are told (make they boss happy).

Absolutely, pure innovators dilemma.

Seems Yahoo! tried to solve this with their "brickhouse" program, a new product incubator, but ultimately it seems that was too disruptive and got axed.

As a cynic who is constantly looking for ways for human structures to fall to pieces, I'd be very worried about the large-company politics of a center-of-excellence/"honors college". When you set up a CoE, the rest of the organization feels put out.

If you put some set of people into R&D roles where they have full autonomy, then everyone wants it. The "Real Googler" issue (~10% of engineers have 20%T and the freedom to move around the company; the rest have manager-as-SPOF bullshit) is definitely a source of resentment at the Big G.

If you're going to do that, then have open allocation for all engineers. It's a much ballsier step, but it avoids resentment of the "special friends club" that gets to do cool R&D and that the rest of the company ends up undermining.

Whilst I generally agree with your view on innovation and the whole "special friends club". But 20% time wouldn't counter the innovator's dilemma: there will still be established power structures in place, reaching to the top levels of the business, who have a vested interest in their status quo (and that doesn't mean no innovation - they can still be innovating), who will fight disruptive innovation. Google seems particularly rife with this!

The value in a incubator, new product development group, or "spin out", (don't think any CoE I've seen fits this model...), is that they have top level sponsorship to go outside of normal process for: hiring, sales, tools, platforms, etc. as required, and just build new stuff. If that's disruptive in the short term, C-levels should be pushing it through for long term gains.

You also place a lot of trust in engineers to have Clue about what to work on. Most will have ideas, many of those ideas would be a very poor use of the companies resources. If those guys feel strongly, they should spin out, and pitch to their old senior execs for seed funding. They'll soon find out if their idea has legs...

In large corporations new hires and acquisitions are handled by different teams. Both teams may be working for the same set of goals, but in ways that are often conflicting in a practical sense.

Haters gonna hate.

When you were 17, did you have the opportunity to do such a thing? No, this is why you are jealous. It's thing to celebrate.

It's not the fact he's 17. There are 25 year olds in startups, as recently as yesterday's Demo Day at YC, who've been given multi-million dollar investment and acquisition offers.

It's the fact that they paid $30m, for what essentially a lot of people here could build. Heck, Yahoo has talented hires, they could create a similar app from scratch for significantly less.

But they instead chose to buy it, at the stupidly high figure that they chose. That is why people just don't understand.

>It's the fact that they paid $30m, for what essentially a lot of people here could build. Heck, Yahoo has talented hires, they could create a similar app from scratch for significantly less.

Ok, I think get your point. Still I have to disagree. The thing is this, many successful ideas don't need lots of genuine innovation and creativity. Instead they need to be 1. realized, 2. at the right time and 3. targetted towards the right people.

IMHO Facebook is a prime example for this. When you look at the history of communities, Facebook was by no means innovative. There have been plenty communities already and the world of communities progressed towards continuous improvements. In fact I used to be a vivid user of many Web 1.0 communities and watched with great excitement the transition from tech-people dominated communities towards general audience communities. Why did Yahoo not create Facebook? Well, it's the same reason small startups can drive big elephants out of business. I think there have been enough posts about this thing on HN in the past.

>But they instead chose to buy it, at the stupidly high figure that they chose. That is why people just don't understand. 1. The authors did put a lot of time in it (yes, multiple people worked on that, check out the website's About) 2. A great number of users are using it 3. Yahoo is not the only company interested in taking over a working website. Market mechanics.