Why Did Yahoo Buy Summly?
businessinsider.com
businessinsider.com
Yahoo bought Summly, a startup with an app that not many people used, made no money, and employed no technical geniuses (since it wasn't actually built by them), because Marissa Mayer believes summarization technology is "going to be huge for Yahoo".
Especially if said people vaguely resemble, well, me. That being, entrepreneurial software folk running companies with trivially buildable products. That's the sort of person in my mind that should have as many foolish megacorporations as possible stumbling over one another to randomly dump tens of millions of dollars in cash upon them.
Given the alternative world, where all companies behave rationally at all times and nobody ever makes mistakes that could possibly make, say, me a gozillionaire overnight, I think I'll keep living in this world.
Keep up the good work, Yahoo!
[Disclaimer: I own a small pile Yahoo stock (that made me a bunch of money in the 90's and has been taking it steadily back ever since), so I probably lost a few hundred dollars because of this particular deal. I'm happy to pay it, much as people who buy lottery tickets are happy to pay it. Having a crazy, aquisition-happy company out there doing its thing is more than worth the price]
You're in luck, that happens all the time with executive compensation packages.
>Though Summly's own Web site once said: "SRI International, with the help of the Summly team, built the summarization technology behind Summly," we are told that D'Aloisio "invented" the product's original technology.
>In a statement provided to us by a Yahoo spokesperson, an SRI spokesperson says: "Basically, Nick developed the original code for Summly."
>"After the original product was built, SRI supported development of the technology and provided artificial intelligence expertise in machine learning and natural language processing."
I don't know about you, but I need a pretty large grain of salt. http://www.youtube.com/watch?v=Y11ps1H6Aq4 is a youtube demo of his first app, trimit, 9 months and $300,000 in VC before summly. It seems 2 comprez ur mezages like this. Maybe that's the original code.
"Fuck, I don't know. And what's with Bezos investing in BusinessInsider? And what is Amazon's business plan anyway? And why does Apple's stock keep dropping whenever it gains market share?"
For peanuts they more or less buy good coverage in a widely read news site. A certain VC fund also invested in them and PandoDaily. It's a great investment, even if Business Insider goes kaput 2 years from now.
Disclaimer: This is just the way I understood it, I might be partially or completely wrong.
Their will be follow ups and some of them might lean towards Yahoo on the next acquisition.
"Angel Investors and Advisors include; Ashton Kutcher, Betaworks, Brian Chesky, Hosain Rahman, Jessica Powell, Joanna Shields, Josh Kushner, Mark Pincus, Matt Mullenweg, Seb Bishop, Shakil Khan, Spencer Hyman, Stephen Fry, Troy Carter, Vivi Nevo, Yoko Ono and many more. We are also working closely with News Corporation on the summarization of their content."
Edit: actually, reading all of the comments on this page, I think my explanation is less likely than the "summly may have had a special license, and SRI couldn't be sold unless summly was acquired as well" (without resulting in lawsuits or sub-licensing deals) and/or "a nice way to pay more for SRI via the backdoor" (artificially increasing the value of the summly stock they held -> more $$ for SRI).
Do we know how much stock SRI owned of the company? Perhaps they provided services in exchange for summly shares? Wouldn't be the first time.
If the real story is that Yahoo bought the technology to summarize articles from SRI International, who partly owned Summly -> why did Summly's owners make 30 million?
Would Yahoo acquiring the licensed SRI technology allow them to void any existing licenses?
I think the author is trying to infer that Yahoo agreed to buy Summly, so that SRI could liquidate their equity in Summly. Maybe, SRI saw Summly as a loser and as part of their negotiations with Yahoo, they asked Yahoo to turn this loss position into a win. So, maybe, then that $30M price was really $20M as part of the SRI deal and then $10M for assets and aqui-hire talent of Summly itself.
Acquiring Summly seems to have been an almost incidental side effect of a deal Yahoo made with SRI for a piece of "summarization technology."
A source tells us that Yahoo has "agreements in place" with SRI for "knowledge transfer," and the acquisition of IP, code, and technology.
Until Yahoo bought it, SRI International held equity in Summly.If SRI actually had equity in Summly, then this is a way to pay off SRI, grab the license for Summly and potentially get SRI to make a change to its licensing agreement with other companies in Yahoo's best interest.
However, I thought that Apple wholly owned SRI, which would make my speculation BS...
Why would Apple change the default search? Well Apple and Google are the main rivals in the mobile market, it makes sense for both Apple to choose an alternative default search engine, as they don't want to strengthen their main rival. I also think Apple's recent 'interest' in robotics (Siri, hiring ex-segway engineer) v.s. Google's robotic cars & Glass, this will be another front that Apple will have to fight Google on.
"1 Billion People Will Use Mobile As Primary Internet Access Point In 2012" http://googlemobileads.blogspot.com.au/2012/02/consumers-lov...
That leaves them with two options, the first being Bing. No way in hell would they choose Microsoft to partner with, with MS' purchase of Skype and close ties with FB you can expect MS to push harder than ever in the Mobile space, over the next few years (assuming they can tie all of their products together neatly).
So that really only leaves Yahoo for search, which works out well for both companies; Yahoo get to survive the battle of the big 3 and still appear somewhat relevant and Apple are no longer strengthening their main rival. I really have no idea what I'm talking about but it sounds interesting.
tl;dr - purchase of summly was marketing and survival by Yahoo
The next logical step for Yahoo! is to move into the enterprise. I know a great startup you could acquire that would accelerate your move into that space. I expect it could be had for somewhere around what you paid for Summly. Call me.
Mindcrime
If Yahoo had gone just to SRI, a competitor could have bought Summly... and Summly may have had, as part of SRI's stake, a perpetual and transferable license that Yahoo didn't want falling into any other acquirer's hands.
There seems to be very little distinction between SRI and Summly.
I don't think sri seeked out trimmit.
That PR alone was well worth the purchase price.
The PR read that Yahoo is acquiring a company but shutting down its product and getting only 2 of their engineers for 30 million dollars. PR like that gets Yahoo's name in the press but does nothing to improve the image that Yahoo has no idea what it's doing.
I think that's true, but only true to those people who read (or remembered or understood) beyond "Yahoo buys hot new company, hot new technology, hot new talent". The PR implication is that Yahoo is investing in once again being hot and new.
For those of us who understand the details of the company and product being bought, Yahoo's reputation was already entrenched. For the majority of readers, however, "hot new Yahoo" was the takeaway[1].
[1] Based on my experience as a journalist / writer, and the half dozen people who raised Summly in conversation with me the week the acquisition went public.
IMHO, any non-tech person who read that bit of news will likely have never heard of Summly, and will only remember the age bit. Which kind of makes it all read as "Yahoo needs help from teenagers" and conjures images of kids roaming around the company.
How does this perceived misuse of funds and focus impact Yahoo employees? Their moral, productivity, and general satisfaction/enthusiasm?
Does it make it easier to attract great new hires who meet Mayer's hiring standards? (http://www.businessinsider.com/yahoo-employees-worry-that-ma...)
Brand marketing has real value, but this has got to be the least efficient way to do it.
Possibly because the local media here found an Australian angle, this was above the fold news (today's version of front page!) across a number of mainstream news networks where I am. So it reached a lot of the desired users.
Again - I don't think this was a good way to do it, of course!
I was talking to my friend and I kept on having to stop him every time he went down the "some 17 year kid created..." No one else he chatted with about it was clearing the smoke from the mirrors. Small sample, I know. I just don't buy that this was a Yahoo! story so much as a story about some 17 year old who build "some news summary app."
Also, I regret to say that, when I overhead a conversation, someone said their browser was Bing and that it was the "bestest" ever. That person is in the same class as me. I study CS.
There is little need to pay 30 million dollars for some headlines.
Even if not transferable, the purchase prevents Summly from partnering with a Yahoo competitor, and that is very likely to have been allowed by Summly's license.
With nearly $4 billion in net income last year, the purported purchase price is less than a penny to the dollar.
I am of course biased, because I believe (like many others) that algorithms are bad at summarization, except for already well-structured content (news are usually like this). That includes most blogposts and videos. My startup (tldr.io) is trying to actually solve the summarization problem using crowdsourcing. For example, here is the summary of this article: https://tldr.io/tldrs/516542c52dcbc1ab3b0000d2/heres-the-rea...
However I think it does expose the difference between media reporting(tech genius,visionary, future leader, hard working) and actual reality(Narcissistic, child like, unprofessional). And those traits have been exposed again, since he claimed to invent the tech and developed the app in the media. Media have hailed shower of praises, mainly because he uses a top PR agency.
Its kind of depressing for me, because it seems to mean being showy, and having a good PR facade is worth far more than people doing the actual work.
Marketing is a huge part of the startup world. There's a reason people are told to stop building at MVP - what you build isn't really important, and you're really likely to throw away what you built and switch to something else.
If you believe Yahoo are stupid you're free to go and short Yahoo shares. They are after all a publicly traded company.
Lets stop with all this stupid speculation where people rehash the small amount of public information for the purpose of linkbait.
I can't tell if this is a brilliant dog-whistle dig or if it's actually being said without irony.
I think my point, in a roundabout way, is that for many/most startups the actual writing of lines of code is not the hard part. At least, that's what I've found to be the case. If you can successfully outsource that task, more power to you.
Facebook, Amazon, HackerNews, Reddit, Wikipedia, Twitter, none of these would be hard services to get to 1.0 for any halfway decent programmer. But somebody had to know what to build, they had to believe in it, and they had to work for it, to learn from their mistaks and flush out the vision. And most of these people probably paid somebody else to write most of the code.
"You do this computer programmer stuff. I keep hearing they're making millions in "the valley", why don't you make an app?"
And yeah, I do think the reviews are quite important to Amazon. A book with 4.5 stars and some intelligent good reviews must be good business for Amazon, don't you think? Even if some people are skeptical of reviews, they are probably much better than most other types of advertising.
When I was 20, I was highly enthusiastic about a card game (actually a pretty good one; it plays really well and people I've never met write me about it) I created, called Ambition, and got into some flamewars that I shouldn't have.
This is one of the rare cases where I wish I were born 5-10 years later; the web is now mature enough that, instead of flaming Wikipedia to make it a "real game", I would have just put it up as an HTML5 game and people could play it. When I was 20, you still had to know a lot to get a real computer setup outside of the CS lab. I didn't quit using Windows for home stuff until age 24 (2007). Now with 'brew install emacs' as opposed to bullshit '90s-era Windows nonsense, it's a million times easier for someone under-20 to start building instead of just talking.
Convex dishonesty (see here: https://michaelochurch.wordpress.com/2013/03/29/gervais-macl... ) can be very tempting when you're trying to make a good idea "catch". You don't really have a sense of it being wrong until you're older (25+) and have seen what trust-sparsity does to organizations.
If you're under 25, I think you deserve a pass on well-intended convex dishonesty. You just don't have enough experience with social systems to see why it is (usually) wrong.
http://gawker.com/5992733/how-to-become-a-teen-millionaire-b...
Basically, Nick was really pushy when he was young. I personally think all of us were, at some point, an immature or annoying teenager so his behaviour is probably not that out of the ordinary for someone his age. Hopefully he is more mature now.
Some of us had to matured early, since we were raised on family farms without the benefit of being mollycoddled. If you need to grow up, I still have family in the business that can assist in positive behavior modification and inter-personal respect training. Might do Nick some good to live/work outside the 1%.
Sure, Nick had early success, lots of ambition, and the typical immature character of a 15-year-old who's enthusiastic about his own ideas. Impulsive, creative, teenagers tend toward pushiness. Ask Wikipedia about my Ambition (sorry, had to make the pun) and you'll hear a similar story. We all have episodes of stupidity in our past.
As for maturity, I probably grew up in totally different time, culture and environment than most of the HN readers. Even my siblings children don't understand their parents background. At 15 we were expected to be top students, hold a job, play sports/music and be respectful to a fault. (Yes sir.) No one would ever want to be consider a punk or a brat.
I have no idea whether this is good or bad. It just seems to be how things are playing out. This is going to sound awfully cliche, but hate the game and not the player.
This may be wishful thinking, but we may be reaching a Singularity of Stupid, and perhaps there will be a Flight to Substance after the cool kids and VC darlings and celebrity investors get burned and their heads shrink a bit. I'd like to see the Flight to Substance and return to Real Technology soon. Curing cancer is a lot more important than another damn social media app.
Social media is the reality TV of startups. It's not common because it's good but because it's cheap, with "cheap" here defined in the truly scarce quantity: technical talent. Any idiot can do SM, which is why there's so much of it.
Coming back to Yahoo! I believe Marissa Mayer has something in mind. She is a smart lady, smart enough to point out what we are pointing out here.
If not, we'll soon see another JC Penney episode here.