Yahoo Acquires Qwiki For Around $50 Million | Hacker News Reader

Yahoo Acquires Qwiki For Around $50 Million

techcrunch.com

74 pointskunle32 comments

My Twitter feed has been lighting up with this. Not because the acquisition is all that interesting in and of itself, but because the app was developed by Chaotic Moon, and they're saying they never got paid. For example:

https://twitter.com/whurley/status/352201365910593536

Better start making popcorn.

Does anyone know if these types of acquisitions are as simple as, "hey I like this company, let's email them with an offer price and see what they say", or is it more of "hi, we like your company, can you please send us your earnings, forecasts, expenses, etc..."?

For anyone out there that's had suitors/offers, I'd love to know what the process for this kind of thing entails.

Sometimes its based on revenue, growth potential or growth itself, etc.

Although, This seems to be an acquihire to get to the technology and employees. And the product AFAIK, didn't really get the traction they were hoping for.

Before they make an offer, they will perform a complete assessment of your company, it is called "due diligence".

They do not easily throw money at you.

Due diligence typically refers to the process after an offer is made and accepted to ensure things are what they are supposed to be.

http://www.investopedia.com/terms/d/duediligence.asp

http://www.merriam-webster.com/dictionary/due%20diligence

I will note that this differs from what wikipedia says is due diligence.

https://en.wikipedia.org/wiki/Due_diligence

Unfortunately most of the information that is needed for true "due diligence" is not going to be possible until signing a contract or perhaps a letter of intent (which means very little of course).

It looks to me that your references contradict you. How many companies have you sold?

I do not know whether the due diligence is supposed to be done after an offer, but when you are negligible to a company that will possibly acquire you, they just propose a due diligence and maybe a deal, or no deal. What would you choose?

larrys is correct; due diligence (as it applies in corporate M&A) occurs after a term sheet or letter of intent is sent and accepted, and is the process of verifying that everything the other party said was true.

Further, your question "How many companies have you sold?" is rude and irrelevant.

Sorry, I tried to look smart talking about things I did not know enough about. I sometimes do this because I am very frustrated, as I am your age and have not done anything significant with my life.

It gives me a huge amount of butthurt looking at people like you, as you are my age and a seasoned entreprenur, rich, happy and successful, and I am a miserable failure.

Sure you know how due diligence is done, probably you have had time to be good at knowledge and experience in business, while your employees whom you have made money from have been working barely seeing the sun.

Are all those people THAT worse than you to justify the income discrepancy, or are they worse than you at all?

Do you consider yourself superior to the people who are of your age or older and are still working as employees?

This seems so fucking unfair to me that people like you get THAT amount of money and life enjoyment. Are you really THAT good, that better than the people who are not entrepreneurs?

Looking at people like you, I suppose you believe you are extremely smart and special and the way you life turned was the only possible way.

The human world is so fucked up.

By the way, I do not think that the question "How many companies have you sold" is that rude, I was just trying to find out whether the person speaks from their experience or not. And definitely it is relevant. So go fuck yourself, smarty pants.

Sold 3, bought 1. As far as companies that is. Enough years in business to have known ESR when he was at the Wharton Computer center.

"these types of acquisitions are as simple as"

Can also be that the target is the one that approached Yahoo either directly or through an intermediary.

In my experience, it's neither. It's a series of conversations about a potential shared future. The most analogous process is dating.

It depends on the situation. Normally, due diligence involves opening (and auditing) books, assets, etc. This is generally focused on valuing the company and may be a long, protracted, affair or a cursory,"these are not the droids you're looking for," check for any crazy liabilities or Potemkin villages.

In a given strategic landscape, the number will be multiplied by some factor. For example, if facebook bought a, twitter bought b, google bought c, d may end up getting pre-emptive offers from microsoft, yahoo, and other suitors. It may or may not be a rational move. In other cases, a "unique" offering may be snapped up on the news that a competitor is sniffing around.

It can get crazy, with offers bumped up by hundreds of millions of dollars.

Yahoo is building a content engine. In a play on the 'chicken returning to the egg' strategy, Yahoo recognizes the negative regression of the Internet towards portal sites driven by Facebook. This is the original trend that got Yahoo going in the first place, and what is the thing that always wins in Yahoo land? Content.

Content is king in that land of Yahoo and summarization of a neverending stream of content is a faster way to get more people to see more content and thus more ads.

Yahoo is making a new portal, one built around summarization of personalized content.

>Yahoo is making a new portal

Yahoo already has a portal - that's what their homepage is and it's hugely popular. The nature of a portal though, is to transport the user somewhere - they are taking all their huge number of pageviews and sending those users on to somewhere else. Yahoo's acquisitions seem to be the opposite of making a portal - they're bringing more and more of the content onboard, trying to turn their portal into a destination. or rather, buying up enough actual destinations that the portal can promote their own products instead of lucky third parties.

<s>I'm sure Yahoo will become the true market leader of the internet by simply buying a few startups every month</s>

I mean, it reminds me so much of "trophy wives".

One does not simply BUY one's way into Mordor.

Based on most of their recent acquisitions (Tumblr, Summly, Qwiki) I'm inclined to believe that they're working on some sort of an automated(?) product for the publishing industry (New Media, perhaps).

I just wish Yahoo's acquisition spree doesn't end badly with employees leaving, because the IP really doesn't seem to be worth anything (in the case of Summly, Qwiki, etc).

What are the odds of that strategy having a positive ROI? It seems like Marissa is calling a Hail Mary.

Hail Mary's work sometimes. I hope it works for Yahoo; I like good competition in all spaces.

Probably 100% odds of being positive for Mayer.

> I just wish Yahoo's acquisition spree doesn't end badly with employees leaving

Right now it is just short term pump and dump. There is 0 strategy. It will only end up with employees getting fired due to Yahoo executives mistakes.

Without being present in the relevant board meetings, it's hard to say this with any realistic certainty... but it certainly does ring true given the hulking, festering mass of anecdotal evidence Yahoo keeps leaving in its wake.

And precisely how many of the CEOs of the acquired companies are you friends with? Three of my friends companies have been acquired by Yahoo, and I quite like Marisa's strategy, as well as the talent she's bringing on

Mayer has some performance-linked bonuses and the acquisitions probably some how improve them.

So it isn't an executive mistake per se but rather misaligned executive and shareholder incentives.

Remember the open-source qwiki clone, fqwiki? It was on HN the same time qwiki raised their first $8M. The demo[1] used wikipedia's page on "snake oil", very funny.

1. http://banksytheluckystiff.github.io/fqwiki/

> In another display of their intent to buy the entire Internet

Sounds accurate to me..

They raised $10.5m... probably at a $30-$40m pre-money valuation for their later stage, $8m round.

Not a great outcome, especially if the investors had liquidation preferences.

Not a great outcome for last round's investors. With a 1x liquidation pref, they just get their $10.5M back with some change on top.

Pretty decent for everyone else- especially founders, assuming they've got a significant stake in the remaining money.

How much cash does yahoo have and where do they get it? Are they profitable at all?

http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics

Profitability Profit Margin (ttm): 82.55% Operating Margin (ttm): 16.44%

Balance Sheet Total Cash (mrq): 3.01B

Yahoo has been (nearly) continuously profitable since early this century. It often surprises people given the general negative feelings toward them.

It really is surprising, but I'm glad they found their way to stay alive and profit as well. Hopefully they'll make some sort of a bigger splash in modern era as well.

"Yeah, let's go shopping"

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