
What's Actually Wrong with Yahoo's Purchase of Summly - hoonose
http://hackingdistributed.com/2013/03/26/summly/
======
api
What this really underscores is that conventional capitalism provides little
incentive for fundamental innovation.

All this stuff we're gluing together is the product of state-funded research,
mostly from the cold war era. DARPANet, the web (CERN), DARPA research on
"augmented human intelligence," etc.

Stuff like: <http://www.youtube.com/watch?v=yJDv-zdhzMY>

(I bet you thought Xerox PARC invented that stuff, right? Or Apple? Nope.
DARPA and SRI invented the entire modern user experience in the 1960s.)

Few companies ever fund that kind of thing. There's two reasons. One is risk
vs. reward-- such projects are typically "high risk, high payoff" as DARPA
likes to say. Most lead nowhere. The second reason is that there is no good
mechanism for monetizing the result. Fundamental innovations are often too
fundamental to patent effectively, and are easy to copy once understood.
They're also often worthless in themselves. They are _enablers_ of value that
is built on top of them.

Fundamental innovation is a lot like infrastructure -- something else free
market players seldom invest in.

This is a problem for today's generation of enthusiastic free-market
proponents. Who is going to pay for the next generation of innovation?

It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-
Lee, is he a billionaire? No, we have 17 year olds making quick millions
gluing together the work of dozens of Ph.D's who will never see that kind of
money in their lifetimes.

It's a big thing that turned me off the Ph.D path. I don't feel like taking a
vow of poverty and toiling in the dungeons to develop some fundamental,
difficult concept that someone else then takes, glues to something else,
flips, and gets rich.

~~~
rollo_tommasi
If those PhD are really so smart, they should have had the foresight to be
born to Morgan Stanley executives, like the Summly kid.

~~~
dsfasfasf
Because I'm feeling a bit (just a tiny bit, I feel I'm almost beyond that)
envious I almost want to celebrate your comment. Although there is a lot of
true into this we have to admit that even kids born into riches are not that
much more likely to be a world success. Because unless you have the
will/desire to succeed you probably won't get that far. (Going to an ivy
league school and working a nice cushy job is not enough in my book)

Granted, some people have been put closer to the finish line then most of us
but I rather not take that as an excuse to explain away my lack of success.

p.s. I grew up in NYC to a working class poor immigrant family. The fact that
I grew up in NYC is all the head start I needed. So far I've made to graduate
school. There is still a long road ahead. No use complaining about which
family I was born into.

~~~
rayiner
Define "success." Being born into a rich family and going to an Ivy league
school won't get you an instant $30m in the bank, but unless the apple really
falls far from the tree, you won't have to try very hard to get into the top
5% in a country where even below-median people live pretty well. Not a bad ROI
on simply choosing your parents well.

------
JumpCrisscross
" _But it's critical to keep tabs on the ratio known as 'glue versus thought.'
Sure, both imply progress and both are necessary. But the former is eminently
mundane, replaceable, and outsource-able. The latter is typically what gives a
company its edge, what is generally regarded as a competitive advantage._ "

I am in finance. I am glue. I take existing people, things (read: capital),
and ideas and bolt them together. Glue is the socioeconomic fabric that gives
value to ideas, things, and ultimately people.

It's not just finance. Craigslist? Airbnb? Facebook? Apple? Glue. Put it this
way: if you walked out the door with their source code, how much of their
value could you replicate? Put it another way: how much would you pay to walk
out the door with their source code and physical assets? Put it another way:
how much would you pay to walk out the door with their source code, physical
assets, and low to mid-level developers but none of their senior guys?

We have laws to protect intellectual property because thoughts and
technologies are copyable, fungible, and ultimately outsource-able. We don't
need such laws to protect relationships, the gluiest of glues. In fact, we
need laws to break down their strength.

~~~
cube13
I think that his point is that glue is only as valuable as the product in
which it's used.

In the case of finance, it's the fact that they operate as the middleman,
getting money from one place to another. The product isn't just getting people
together, it's providing a smooth way to move money around.

The other examples have a product where individual technologies were melded
together to produce that specific product. They did much more than just take a
few technologies, then bolt them together.

On the other hand, Summly seems like the technology should be the product. NLP
is a very hot research topic, and when I first saw that the product went for
$30 mil, I thought that they had some brand new NLP technique or algorithm
that Yahoo was snapping up. In fact, several articles, like this NY Times
article([http://www.nytimes.com/2013/03/26/business/media/nick-
dalois...](http://www.nytimes.com/2013/03/26/business/media/nick-
daloisio-17-sells-summly-app-to-yahoo.html) ) supported that view.

However, the truth is that they just took a pre-existing tech, and bolted it
onto an iOS application. I can't comment about the app, since it's been pulled
from the iOS store, but it does sound like they attempted to do something new
with the interface, but that's about it. So Yahoo basically bought 2 engineers
and a Siri NLP engine license, the later of which will undoubtedly become more
expensive when the contract is renegotiated.

~~~
JumpCrisscross
I'm commenting less on Summly and more on the general case. People who bolt
together existing tech into something people want are extremely valuable. They
have identified demand and found a way to address it using off-the-shelf
components. The risk, often, is that someone else can just as easily bolt
together the same components. This risk is mitigated by locking in the demand
source, e.g. through brand recognition from your first-mover position. Someone
able to rapidly bolt together a product that they subsequently ensconce with
piercing marketing or another form of customer lock-in is a gold mine.

------
alaskamiller
Overpaying for apps is the new overpaying for social networks for that vague
master bullshit artistry of "reaching" users.

Yahoo irrationally overpays for tons of stuff, AOL irrationally overpaid for
Bebo, there was that high school girl that made a social network and makes
millions of dollars so she bought her mom a house, there are plenty of other
data points I filed away in my head over the years.

Tons of things happen in Silicon Valley everyday that makes no sense to
outsiders, or sometimes even to those stuck in the tunnel. Are you new here?
Sit, enjoy a cup of tea meanwhile.

Throw on top of that the youth obsession in tech has been around since I was
17 eleven years ago and it will continue to stay. Youth is forever a
distraction that you have to grow out of. If you don't then consider seeking a
therapist.

Your brain hurts from trying to neatly organize this particular liquidity
event as fair? Maybe you can't. Maybe it doesn't matter. Get over it, stop the
hating, and get back to work.

Funny enough, mainstream media with old talking heads are spinning this
narrative two ways: 1) the ever louder need to get every child to learn to
code and 2) it's so fun bit of escapism to think what you would have done with
big money when you're still a teenager contrasted against the $325MM Powerball
win in New York.

All in all, this barely registers as a blip on the average American
considering real shit that's ongoing with fairness over marriage equality in
SCOTUS.

~~~
rdouble
It's more like Yahoo! is overpaying for app development teams. They have to,
as they are way behind in mobile and nobody good wants to work there.

~~~
macspoofing
But $30M for two developers?

~~~
kscaldef
And paying out all the other investors, presumably.

------
pan69
This is my (pessimistic) take on this Summly thing. I think the following
scenario happened:

15 year old kid does something with computers and for some reason the press is
all over it. Some smart investors thinks; "hey, I can use this to make money".
They invest money into this 15 year old which gives him more press coverage.
Wait a few years and the investor gets his buddies at Yahoo to buy it for a
substantial amount of money. Ka-ching, money in the bank.

~~~
bitcartel
Surely you mean Ka-Shing ;-)

The first investor was Horizons Ventures, the investment arm of Hong Kong
billionaire Li Ka-Shing, who put in $300k.

~~~
bitwize
That's what I call an aptronym.

~~~
bitcartel
Li Ka-Shing's right-hand man is Canning Fok, who is often referred to as, yes,
you guessed it, Cunning Fox.

[http://www.smh.com.au/business/the-sons-rise-in-the-
states-2...](http://www.smh.com.au/business/the-sons-rise-in-the-
states-20080519-2g0b.html)

------
mindcrime
_What this really underscores is that conventional capitalism provides little
incentive for fundamental innovation._

I'm not as convinced as you may be, but there certainly seems to have been a
decline in past decades, in terms of private funding for basic research. At
one time, Bell Labs, Xerox, IBM, HP and others did quite a bit of basic,
fundamental research. IBM still do, last I saw, but here's the question... if
it made economic sense to fund private, basic research in the past, what has
changed? WHY don't the HP's and Bell Labs, and Xerox's of the world still
spend as much on research.

Note: I am, of course, talking out of my ass here, as I have no actual
objective numbers to support the idea that private funding for basic research
is diminishing. But, subjectively, from what I read, see reported, hear, etc.,
it sure seems to be the case.

 _All this stuff we're gluing together is the product of state-funded
research, mostly from the cold war era. DARPANet, the web (CERN), DARPA
research on "augmented human intelligence," etc._

That's probably true, but there is a danger in looking at the past on a macro
level and saying "this means the future must be $THISWAY". The problem is, we
don't know what the other outcomes could or would have been. If DARPA had
_not_ funded all of that research, we cannot say that the same innovations
would not still have been developed via other sources. History, IMO, hints at
conclusions, but it's hardly a definitive guide to the future.

~~~
JonnieCache
_“Based on the NYSE index data, the mean duration of holding period by US
investors was around 7 years in 1940. This stayed the same for the next 35
years. The average holding period had fallen to under 2 years by the time of
the 1987 crash. By the turn of the century it had fallen to below one year. It
was around 7 months by 2007.

Similar pattern exists in the UK also as shown in the chart above. There the
average duration has fallen from around 5 years in the mid-1960s to less than
7.5 months in 2007.

Over the past 15 years even in international equity markets, holding periods
have fallen. The Chinese market was red hot until few months ago. However the
duration for the Shanghai stock market index is close to just 6 months.This
shows that Chinese investors do not have a long term horizon.”_

[http://topforeignstocks.com/2010/09/06/duration-of-stock-
hol...](http://topforeignstocks.com/2010/09/06/duration-of-stock-holding-
period-continues-to-fall-globally/)

------
ChuckMcM
I think the author makes this comment:

 _"Summly's entire business model seems to revolve around catering to this
demographic. Frankly, it pains me."_

I reads like a critique of Chubby Checker's "Twist" from a professor a
Julliard. Perhaps, and I say that because I can't know what they were really
thinking, but perhaps that was the point. This company had successfully
"catered to this demographic" (which was defined as young hipster like
brogrammers) and while those guys drink their PBR and deck out their mancaves
perhaps it is a demographic that Yahoo desperately wants to reach? Maybe the
whole point was that Yahoo folks were building things for middle-aged dot
boomers and not for the cool kids.

Maybe the goal was to get more people who could quickly assemble a MVP from
existing APIs that appealed to the emerging cohort of buyers and trendsetters.
Maybe NLP wasn't the point.

~~~
dmix
> people who could quickly assemble a MVP from existing APIs that appealed to
> the emerging cohort of buyers and trendsetters.

Oh man reading that I just realized that was exactly describing the type of
consulting gigs I always get (and I'm young).

Are we a side effect of the pump-and-dump VC culture or is this a legitimate
new way of developing software/products?

~~~
lelandbatey
Well, I'm not finding a lot inherently wrong with using new and existing apis
to make other things. I would in fact argue that that is why we create apis.

However, I feel like people aren't very upfront with the fact that they are
building on top of APIs. For whatever reason, there's this perception that
arranging existing resources into a more valuable arrangement is somehow not a
valid approach.

I'd love to hear others thoughts on this.

------
gesman
That's a deal between Yahoo management and Summly investors. Lucky young guys
got themselves warmed up in the middle of big guys hugging each other.

~~~
richardjordan
Yes. Yes it is. +1

So much of what goes on in transactions in Silicon Valley has little to do
with the headlines and a lot to do with power brokers and their interests.

It's a shame we don't have investigative journalism in Silicon Valley any more
- partly because it's out of vogue nationally, and partly because Silicon
Valley journalists love to hob-nob with investors. I'd love to see a follow-
the-money on this deal.

~~~
gesman
It's not necessarily "wrong". It's just the way this machine operates.

In fact I think it will be beneficial for Yahoo's future, but not for the
reasons PR and news stories are hyping it.

The problem for Yahoo now is to explain it to investors who takes it all at
face value.

------
richardjordan
Ouch. Still, hard to find fault with the analysis, no matter how unpopular it
may be with much of the readership of HN. Many folks here would love to sell a
company to Yahoo! for $30MM after 18mo with minimal engineering effort and
download numbers probably below those of many folks reading the news on HN.

~~~
theklub
We should all be very happy. This is a sign that easy money is still out there
for the clever individual. I applaud the kid for what he has done. Yahoo might
be stupid, but we've known that for a long long time.

~~~
richardjordan
I hear what you're saying, but the problem with poor deals like this which are
done for reasons other than the headline reason, is that they're effectively
random. You cannot structure your business in order to get an exit like this.
You tend to luck into one - or more often you get it because you have a
network of unpublicized connections who have interests that are not overtly
clear. The rest of us? We should be happy when money is going to solid, well-
built businesses with metrics we can all understand rewarding us for hard work
and innovation - because unless you're already an insider, that's the only
thing you can control to get a win.

------
noonespecial
Perhaps the license from SRI is the valuable part and for some reason, it
conveys intact with the sale? What would SRI charge to license to Yahoo vs a
17yo kid playing "my first startup"?

~~~
astrec
That was my initial thought too. We're a cynical pair.

------
dr1337
To see why Yahoo is doomed, let's compare and contrast Yahoo's recent
acquisition of Summly with Google's DNNResearch.

Summly - Sloppy mobile app that _licenses_ technology from SRI.

DNNResearch - Groundbreaking fundamental CS Research into Deep Neural Networks
that won Merck's Kaggle Competition.

Enough said.

 _Edit_ links -

[http://techcrunch.com/2013/03/12/google-scoops-up-neural-
net...](http://techcrunch.com/2013/03/12/google-scoops-up-neural-networks-
startup-dnnresearch-to-boost-its-voice-and-image-search-tech/)

[http://blog.kaggle.com/2012/11/01/deep-learning-how-i-did-
it...](http://blog.kaggle.com/2012/11/01/deep-learning-how-i-did-it-merck-1st-
place-interview/)

~~~
cpeterso
SRI would probably have charged Yahoo more money to license the technology
than SRI charged Summly.

------
guelo
> For 95% of the news I read, that can be done with a regexp that slices out
> the first sentence.

Interestingly, that seems to be what Google News does for its summaries. It
works well most of the time but I've seen some screw ups. Also interesting,
Mayer worked on Google News so she probably knows this topic well.

------
onan_barbarian
It's amazing how many column-inches, irate blog posts, etc. can be generated
by a off-the-record "sources close to the deal said that the deal was worth $X
million" remark from one source.

Having seen this for a Y Combinator exit (no names) where the bullshit factor
was around 10X (according to what I've heard from actual insiders vs the
Techcrunch leak), I find it hard to get too exercised about it or to
understand why anyone else is so worked up.

------
pron
This post is full of anger, desperation and disdain, but of the exquisite
kind, and the kind I agree with, so it's great!

~~~
talkingquickly
Fantastic mini example of the point the author makes about TLDR's

I started reading your comment (first 9 words), nearly stopped reading it
thinking "they don't get it," carried on for some reason and 5 words later it
showed that I agreed with you completely!

~~~
pron
I was just trying to test my non-artificial intelligence at sentiment analysis
and text summary :)

------
benastan
It doesn't seem to matter what the app does or how its built.

The story goes something like (a) people (yahoo) want mobile apps (b) the kid
got investors to give him cash (c) people downloaded it generating 'buzz' (d)
more investors and cash (e) more downloads and publicity (f) yahoo plays right
into the hands of the investors and the hype around a young founder (g) yahoo
buys the company, making the kid a millionaire, it's a PR grand slam, bringing
more publicity and 'users' to the app (for now)

It works out really, really well for the investors and founder; in my opinion
it seems like Yahoo got duped.

~~~
cube13
>yahoo buys the company, making the kid a millionaire, it's a PR grand slam,
bringing more publicity and 'users' to the app (for now)

There aren't any new users getting added. The app's been pulled from the iOS
app store.

[http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-
ac...](http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-acquire-
summly)

------
michaelpinto
Yahoo didn't buy the technology, they purchased the talent. Talent that knows
how to reach an audience. You can always get high quality engineers to figure
out the rest...

~~~
omellet
The article's main point is that the founders didn't do anything really
noteworthy, technologically speaking, and so Yahoo overpaid for the talent in
question.

~~~
snaky
>the founders didn't do anything really noteworthy

1M+ downloads for an app with licensed technology is noteworthy.

~~~
flyosity
A million downloads of a free app is not really that noteworthy. My friend
made a simple, free iPhone game in a weekend where you tap on a soccer ball
and keep it from dropping and routinely gets 10s of thousands of downloads a
month with absolutely no marketing.

~~~
badgar
Your friend is a genius and might be the next pg.

------
spoiler
Am I the only one who is not surprised Yahoo! bought it? I'd be surprised if
Google, Apple, Adobe, Microsoft or some other respected company did it.

I mean who really uses Yahoo! these days anyway? The only good thing that they
still have to offer is YUI (most notable is its compressor). I don't want to
sound like a Google supremacist (although I might be guilty of it), but Google
offers a better search engine, a better mail service (people use yahoo mail
only for traditional reasons). To me this just feels like Yahoo! wants to join
the "we <funded|bought> this awesome <product|service|project> created by this
<16...22> old."

(I hope) Other companies did it because it improved their service. Yahoo did
it so it would be talked about.

I could be wrong, and $30 mil. might be a lot for an attention whoring attempt
(let me just point out that it's successful so far), but what else do they
have to do with the money they acquired with their past success.

Summly version: Yahoo! bought us in an attempt to save its stale ass from
Oblivion.

[If anyone is reading this, they are probably in the gutter (down vote)
section of the thread... Welcome to the dark side, we lied about the cookies.]

------
rayiner
If "brogrammer" is a thing, this picture is next to its definition in the
dictionary: <http://hackingdistributed.com/images/egs-small.jpg>

~~~
talmand
Why, because he's wearing sunglasses? Color of his shirt? He has short hair?
Is near water? Which is the trigger?

~~~
rayiner
The Oakleys, the beach, the looking off to the side. It's not any one thing,
it's the totality of the circumstances.

~~~
emin_gun_sirer
For the record: not Oakleys, not at a beach, but yes, looking to the side.

If we're done picking on looks and personal issues, something I tried to avoid
very carefully in the article, perhaps we can focus on content and ideas?

~~~
rayiner
Not picking on anybody. From your pic you look like a brogrammer who codes by
day, and slays on the LES bar circuit by night.

Or am I missing the sense in which we're using "bro" here?

~~~
RickHull
> _From your pic you look like a brogrammer_

> _Or am I missing the sense in which we're using "bro" here?_

I'll bite. You are completely missing the sense of _bro_ grammer. Brogrammer
refers to behavior and attitude and not looks or activities.

~~~
rayiner
I think looks and activities is inextricable with "bro"-ness. You're not
slaying the LES bar circuit unless you have a certain look along with a
certain behavior and attitude.

~~~
talmand
I feel sad for anyone that has to experience an interview session with you, if
such an event happens, because you clearly have no issue with guessing a
person's life and behavior from one small photo that you are seeing out of
context. Even though the person in question stated that you are in fact wrong
in almost every way of what you think you see in the picture. In fact, I'm
sensing a small bit of projection in this because your statements make no real
sense at this point, so you appear to be lashing out at a stranger for no
apparent reason. Perhaps jealousy?

------
jval
I just finished watching an interview with D'Aloisio on the huge 7.30pm
current affairs show here on the ABC in Australia (unimaginatively named
7.30).

The interview opened with the newsreader restating the fact that he had been
covered on the front page of almost every major newspaper. Then here he was,
talking to her on TV, talking about Yahoo, and their amazing 'focus on mobile'
etc etc. Suddenly it dawns on me - I live in Australia. Australia is
practically the other side of the universe. Yahoo has a fresh faced 17 year
old kid talking to just about every living room in this country about how
focussed they are on mobile.

Every country in the Western world from the US to Australia and beyond, front
pages of newspapers, prime time TV interviews on government owned ad free
broadcasters during primetime - no amount of PR spend can buy this.

I know the PR rationale was mooted, but nobody could have imagined it would be
this big.

------
minimax
_So, what is Yahoo signaling to the world? "We value glue more than thought."_

What? No it doesn't signal that at all. Look at Yahoo's other recent
acquisitions. Yahoo is buying mobile app companies. Spinning it as technology
vs glue is silly. It's all about buying expertise in mobile.

------
lecha
Insightful piece. Thank you.

One point I wish the author would elaborate on is the value a company gets by
acquihiring a great designer. I haven't used Summly so I cannot measure the
talent of a designer Yahoo gets. But it would be wrong to ignore the design by
focusing on technology advancement in "glue vs thought" argument.

How much would a company pay to acquihiring Jonathan Ive or Philippe Stark?

The author may be right to question the designer's talent or by googling "I
use Summly", but it seems rather shallow analysis.

------
6ren
A common motivation for acquisitions is to buy users, not technology. YouTube
used PHP and the video tech in flash - but they were the ones to grow the
userbase (and continue to do so). If Summly had the product/marketing to be
popular and growing, that's why Yahoo bought it. (though it seems Summly
doesn't have the strong network-effects of YouTube, of gaining both producers
and consumers).

 _EDIT_ they could be buying market-product fit...? but yes, if they killed
it... hmmm...

~~~
Trezoid
Considering that yahoo _immediately_ killed the product, and that its 1mill
total users read 90mill summaries in ~18 months (that's less then 1 a day) I'd
say they aren't buying users.

------
kefs
A few reviews of Summly, the app.

[http://www.cultofmac.com/199513/summly-actually-quite-
good-n...](http://www.cultofmac.com/199513/summly-actually-quite-good-news-
summaries-for-free-review/)

[http://www.phonesreview.co.uk/2012/11/05/summly-app-may-
fail...](http://www.phonesreview.co.uk/2012/11/05/summly-app-may-fail-the-
news-limelight/)

[http://www.reviewsontherun.com/all/type-of/reviews/summly-
io...](http://www.reviewsontherun.com/all/type-of/reviews/summly-ios/)

(Trimmit) [http://www.fastcompany.com/1772823/15-year-old-creator-
trimi...](http://www.fastcompany.com/1772823/15-year-old-creator-trimit-app-
makes-regular-old-entrepreneurs-seem-slackers)

(Trimmit) <http://appadvice.com/appnn/2011/07/quickadvice-trimit>

And some pre-acquisition hype:

[http://allthingsd.com/20121213/mobilemobilemobile-yahoo-
eyes...](http://allthingsd.com/20121213/mobilemobilemobile-yahoo-eyes-hipster-
teen-founded-summly-news-app/)

------
babuskov
Whoa, I had an idea creating something like that in 2011. And I thought "it's
stupid, noone would use it except me" and "google or yahoo would probably
build a much better one and have 10x more engineers iterating on it".

Which brings me to the point: Why did Yahoo buy this, instead of building it
themselves? Are they really that thin with engineering talent?

------
Choronzon
Actually extracting metaphors via Natural Language Parsing of Ulysses
interests me far more than yahoo blowing money or some lucky kid winning the
lottery.If its not an isolated example the field is more advanced and
interesting than I suspected. I dread to think what parsing Finnegans Wake
would be like.

------
jpdoctor
> _By definition, Yahoo's directors know how to spend Yahoo's cash reserves
> best._

This is absolutely incorrect. There are many instances in which there is a
personal financial connection between a board member and an acquired company.
For example, a board member is a limited in a VC fund.

Didn't bother reading after that.

~~~
pron
Ironic. The post says: "But it's really not ok to act functionally illiterate
when you're not actually illiterate, when an advanced society that once put a
man on the moon worked so hard to educate you."

If you'd read the text more carefully you wouldn't have missed the sarcasm of
the passage you were so quick to dismiss. He was being sarcastic!

~~~
bcoates
I didn't see any sarcasm about that; through the rest of the essay he seemed
to continue to take at face value that Yahoo's management is doing what they
think right for Yahoo. The summly acquisition being some sort of self-dealing
fraud would contradict his entire point.

------
johnrob
Yahoo should not be surprised when future prospective employees would rather
work at or found a startup.

------
dr_
I've never used Summly but perhaps it would have come in handy when reading
this article. Many businesses have been built by riding on the backs of
others. A good number of them have already been mentioned in the discussion
here. Many others have also tried, and failed. And have lost both time and
capital in the process.

Lets not forget something here - a 17 year old kid licensed technology from
SRI and then developed this app. How many 17 year old kids do you know who
would even think to do something like that? It's certainly not something that
ever crossed my mind as a teenager. Obviously Yahoo sees something in him
(them) that many others don't. Can't comment on whether its the right move or
not, but just look at their stock price since Mayer took over.

------
niggler
What's actually right about Yahoo's purchase of Summly: we are still talking
about it, and are still reminded that Yahoo exists. The marketing was great
(the video is really well-done), and to be honest yahoo really could use some
marketing boost at a time like this.

~~~
rdl
I'm reminded Yahoo exists every time I check my false-negatives spam filter
training file. Virtually all spam which gets through to my inbox is from Yahoo
addresses, often from compromised actual people I need to receive mail from
(including at least one partner at a fund, my dentist, etc.)

------
powertower
I dont understand why the current wave of criticism is leaving the market
penetration (and 1st mover advantage), brand, and million users (and climbing)
out of the picture - like it's not important. And are assuming that Yahoo must
of paid it all to hire 3 people.

~~~
cube13
Uh, the end result is that Yahoo paid for all of it to hire 3 people.

The app has been pulled from the app store(
[http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-
ac...](http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-acquire-
summly) ), and it does not sound like it's going to be back. Which is a
disappointment, because I wanted to know exactly what the heck the app is,
since I've never heard of it before.

So Yahoo's dropped any market penetration, the entire brand, and the million
users. For 3 engineers and a few software API licenses.

~~~
powertower
My bad.

I did not realize they were shutting them down.

------
dvt
Article screams of "you jelly?"

And most of us are, indeed, jelly. The bottom line is, if you're into start-
ups, you understand that in many ways it's a lottery. Instagram won last week,
then Pinterest, and now Summly. This is the norm. Over-paying for products
that aren't really even products.

I'm surprised a professor at Cornell hasn't understood the VC culture yet. I
was talking to a friend last week about this cute chick he wanted to introduce
me to. Turns out she works at a relatively famous startup in L.A. as a
secretary. It also turns out that she makes more than my mom (who's a research
chemist). I've just learned to /sigh, move on and then quickly get back to
work.

Throwing money around is how Silicon Valley works. Get used to it.

------
frozenport
Yahoo is a media not a technology company. Can you recall something Yahoo has
done innovative?

~~~
kev009
They're not too shabby at engineering. Heard of Hadoop?

~~~
frozenport
Certainly I know some people of U of I who worked on it, but Hadoop isn't
developed for a Yahoo user. It is used mainly for serving ads and doing market
analysis. A normal Yahoo user reads their mail and the sports page. Google
makes its bread by facilitating advertizements on other peoples websites - it
provides these kinds of technologies to other people. How they put up
advertizements is their choice. Google's clients are responsible for content.
Yahoo is more about providing media, they happen to make revenue with their
own internal advertizements.

Google's primarily goal isn't to own every computer screen, they just hope
that their ads make it to every screen. Yahoo's goal is to fill every screen.
For Yahoo buying screen space is a end in itself.

------
topherjaynes
I thought a good bit about the reflection of TL;DR. My Gut reaction was to
think we're heading to an idiocracy, but it could be people just getting
smarter. Trust me I love the virtues of deep reading, but think of all the
knowledge you could gain if it was done well? There is an entire business
about providing executive summaries on books, news, and other important bits
of information that we're inundated with. While I would cringe at a TL;DR for
The Brothers Karamazov, I think there is some merit to being able to get a lot
of tidbits quickly from a lot of news source. Would be very interesting to
compare Fox, NYTimes, and the Washington Post on their 'gist.'

------
ed56
To the author: Would you have not taken a buyout offer from Yahoo! if you were
in this kids position? All HN discussions regarding this topic have just
screamed jealousy/disdain. It is as if people come to HN to read an
intelligent argument to argue for their immature feelings. Also, the most
important premise in your argument, that their technology was licensed, is
incorrect. Their natural language technology was 100% proprietary according to
them, and not "licensed from SRI" [0].

[0]: [http://blogs.wsj.com/tech-europe/2013/03/26/what-
does-30-mil...](http://blogs.wsj.com/tech-europe/2013/03/26/what-
does-30-million-buy-you/)

~~~
xradionut
To truely understand what's going on here you have to follow the money. All of
the money.

This is not a simple story of a hard working smart kid winning the tech
lottery with a hot app/technology going from rags to riches. This is an
arranged marriage, a PR stunt and a good-ole-boy deal all rolled into one.
It's a VC fuck-you to all people that truly have innovative ideas, viable
businesses, and dedicated employees that are trying to get management to
notice solutions instead of golfing with "consultants" or blowing big money on
solutions that could be built in-house for 1% of the costs.

The kid was born on third base, got home on a wild pitch and some folks think
he hit a home run.

~~~
jeremyjh
I wonder if Yahoo has got the rights to make a movie about this fairy tale.
That's about the only way I can think of for them to cash-in. But it seems
more likely that they just got sucker-punched.

------
dgbsco
I've never felt so guilty skimming an article.

------
mattbarrie
I doubt the acqui-hire was for $30m. I would believe probably $3m, structured
as $1m each over 4 years, with each person getting 100k in the first year,
200k in the 2nd, 300k in the 3rd and 400k in the fourth. Lots of these "acqui-
hires" get reported in the press at some stupid number. I know a couple that
were reported way off. The original journalist says "it sounds better", and
then all the secondary sources just quote the figure from the first.

~~~
foobarqux
Are the reported numbers that you are familiar with outright falsehoods or are
they distortions like an unrealistic earn-out provision?

Besides spreading the amount over many years what other tricks are used to
bump up the reported number?

------
gyom
I like his point about how trivial "tl;dr" summaries often don't get at the
core idea of an essay, but they still work for news formats which are kinda
"tl;dr" already.

------
chx
This is the second article from the same author that is well reasoned and
factually incorrect (the first was the MongoDB hate). Check
[http://blogs.wsj.com/tech-europe/2013/03/26/what-
does-30-mil...](http://blogs.wsj.com/tech-europe/2013/03/26/what-
does-30-million-buy-you/) to see there is some research going on there. Also,
glue or not, a successful mobile, one that has an audience is worth some
money...

------
teyc
Summly as a technology play is only moderately interesting.

What I suspect though is Yahoo desperately needs new users. We know that most
Yahoo visitors use Yahoo out of habit from the 90s. Where are the new users?
Having a young man with penchant for both technology and publicity be the
public face of Yahoo the same way as Marissa did with Google gives Yahoo a
slightly better edge.

I expect Nick to be groomed for bigger things. Congrats.

------
lmg643
Do we know that the purchase agreement did not include a multi-year license to
use the SRI technology across yahoo, or are we just reading a lot of wild
speculation?

It is altogether possible that yahoo made a foolish purchase, but it is also
possible that they made a great purchase and we are just guessing at the
details and assuming that all $30 million went to the staff they acqui-hired.

------
billsix
That article was way too long to read on my device. A summary, 1/8 of the
length, would have given me all of the necessary information.

------
rdouble
All of Yahoo! is "bolt on engineering." It's clearly not an entirely losing
strategy as Yahoo! is still around, somehow.

------
parennoob
If this article's premise is correct, Yahoo is buying Summly in order to
generate more news about Yahoo rather than the intrinsic value of Summly.

However, this article is adding to the flood of news about Yahoo acquiring
Summly, thereby giving the purchase even more publicity. I wonder how many
articles have taken the same approach.

------
kunai
Wait a second. Can the founder even code?

It would be particularly impressive if he had written the backend and then
hired his team for frontend and design.

If all he had was an idea, this is really nothing to marvel at, especially on
HN. Interesting why Yahoo chose to buy him and his team. PR? Maybe.

------
YPetrov
While I don't disagree with this opinion, I believe that there is also a
positive side of the problem and I have expressed my opinion here -
<https://news.ycombinator.com/item?id=5447184>

------
tdr
KeenSkim created it's own tech - will soon launch an iPhone version

<https://www.keenskim.com/static/KeenSkim_iPhone_app.htm>

<https://www.keenskim.com/>

------
escherba
What surprises me is that the same people who complain about patents and
intellectual property are often the first to bring up the discussion of how
market tends to undervalue fundamental research. You can't have your cake and
eat it too.

------
brown9-2
Totally unrelated, but what does _I interviewed at DE Shaw when Bezos was
there and turned them down for 1/10th of their salary offer_ mean? I'm having
trouble parsing the "for 1/10th of their salary offer" part.

~~~
talmand
I took that to mean he opted for a different job at lower pay for whatever
reasons he had at the time.

------
stevewilhelm
Someone should put a reminder in their Google calendar to ask whoever is CEO
at Yahoo at the their 2014 annual shareholder meeting what the Summly team has
done for the company over the last twelve months.

------
usablebytes
The beautiful girl Jenny falls for Chris and marries him. I think she has made
a terrible mistake; it's natural to be jealous. But I keep the feelings to
myself.

------
at-fates-hands
The decades of anything being built from absolute scratch are long gone. You
can essentially say we've hit the ceiling in terms of technology.

~~~
wmf
The author of this rant created a NoSQL database that's so much better than
MongoDB no one believes him. So he probably doesn't think we've hit any kind
of ceiling.

------
graycat
The OP seems to be calling for bringing unique, new, powerful, valuable
technology to information technology (IT) products, presumably as a way to
faster progress for civilization. If so, then okay. But:

Given a claim of such technology, an investor doing 'due diligence' has to
evaluate it. Then if the investor is a venture partner (VP), they have to
consider the 'guidelines' they agreed to with their limited partners (LPs) and
for the investment maybe 'explain' to the limited partners. Then the LPs have
to 'judge' the accuracy of the due diligence. But, the VPs and LPs don't like
to do, or get involved with, such things. Instead they just prefer to "let the
market decide".

Are the VPs and LPs wrong? From some data posted recently by Fred Wilson at
his AVC.com, apparently they are wrong: The numerical data seems to say that
in recent years the 'venture capital asset class' has done significantly less
well than an index fund or the S&P.

For more, the financial value of the coveted, honored, respected, celebrated
"unique, new, powerful, valuable technology" in IT doesn't have such a great
track record at least in the sense that it's not easy to find the yachts. Can
take this situation as either a slap in the face of the hopes of financial
gains from research or as a great, wide open field, free of competition, for
such gains from research.

One argument for the research is that what the venture partners are looking
for is exceptional; if a venture partner gets 2000 contacts from
entrepreneurs, evaluates 100, and invests in 3, then clearly they are looking
for something exceptional. Well, looking for value in "unique, new, powerful,
valuable technology" from research should be a promising place to look for
something exceptionally good (in ROI).

However, look at two more points:

First, what does it take to evaluate research? For one important case, we know
well: In school mostly it takes a Ph.D. committee that, for each Ph.D.
granted, spends maybe hundreds of hours in close work and evaluation. Then
after school, for a submitted paper, there are reviewers, editors, and editors
in chief, and they all play a role. To get to be an editor in chief is, from a
Ph.D. and a good research record, maybe a 20 year effort. So, how are venture
partners, rarely with a Ph.D., who don't really do research, going to do the
work of reviewers, editors, and editors in chief, not just in one narrow field
but in everything that might land in their in-box? They can't. Could they
'outsource' the evaluations? Maybe, but there would likely be risks there.

Second, the VPs and LPs seem to be highly concerned that somehow 'the market'
is some unpredictable, chaotic, inscrutable swamp where even the best research
results can get laughed at and die.

So, apparently so far in IT the investors just concentrate on 'let the market
decide'. If 'the market' means that Yahoo writes a check mostly just for
reasons of buzz, publicity, internal inspiration, etc., so be it.

Could there be something else? Perhaps: (1) Get what one VP calls a "big ass
problem" (BAP). So, if can get a good or much better solution for this BAP,
then there should not be much question about virality, 'traction', happy
users/customers, or 'product/market fit'. Or there is Sequoia's optimistic
remark, "A huge market with customers yearning for a product developed by
great engineers requires very little firepower.". (2) Do some research to get
the solution. Or to modify the (1)-(2), get a list of BAPs and a list of
research results likely can achieve or build on, and then pick a pair of a BAP
and a research result that provides the needed solution. This pair picking is
part of 'problem selection' and widely viewed as important for success. Then
do the evaluation of the solution, possibly presented just on paper, e.g.,
much as in a journal article, but with a better organized approach than the
peer-reviewed journals use.

So, can such pair picking and evaluations lead to success? For success in the
market, recall the BAP. For the success research promised, yes. Examples of
this last? Sure: What the US DoD has done, with batting average much higher
than the VPs, since about 1940. E.g., the USAF's GPS was the second version;
the first was by the US Navy, with crucial early work at the JHU/APL in
Maryland. The work was proposed essentially just on paper, and the rest is
history. For another example, when the U-2 was shot down, the US wanted a
replacement -- Mach 3+, 80,000+ feet, 2000+ miles without refueling. Kelly
Johnson drew a picture, and the rest is history, right, the SR-71. Net, it
really is possible to plan projects with "unique, new, powerful, valuable
technology" and execute the plans successfully. VPs, LPs, listen up.

Net, likely a better solution would be for researchers to talk of the value of
their work at media parties on their yachts, 250+ feet long. Or "money talks".
Or, the VPs and even the LPs have been known to rush for 'the next big thing'.
Well, a few IT researchers with $1+ billion exits could be a 'next big thing'.

Funding for such work? Well, just do an MVP by licensing some code from SRI or
some such, put a mobile app in front of it, get a lot of publicity, sell out
for $30 million, and then use that cash to fund the real project. So, that
would be a $30 million Series A where the VPs get 0% for a project without yet
even a single dollar of revenue, user, or line of code!

Researchers, believe me: When your serious project is the next big thing and
you are worth $1+ billion, your little MVP $30 million weekend will be
forgiven!

Whatever we do, currently we are crawling like a snail and, instead, very much
need to get going, and VPs and LPs need to be part of it for all concerned
including themselves.

------
greenyoda
_"Finally, it doesn't matter how much money Summly got or whether Yahoo wasted
its money."_

Yahoo shareholders might disagree on this point.

------
jskrablin
I suggest reading Fahrenheit 451... similarities with TR;DR problems outlined
in the article are striking, at least.

------
parnas
it's about comfort zones, my 17-yo will take out the trash, but only to the
screened in porch, not to the can. He also won't walk around the corner to get
the can if it is still in the driveway, he will leave the trash exposed to
racoons on the deck near where the can is supposed to be. Comfort zones...

------
vnkatesh
So what he means is that the iPhone, which is essentially 'glued on'
technological device, is unmarketable?

------
rythie
The only justification is, that the team (all two of them) can generate $30m+
of new revenue for Yahoo.

------
chebert
I'm jealous of this kid.

------
thescorer
TL;DR

~~~
pron
:)

------
michaelochurch
I'm sure a lot of people are resentful or disgusted that a 17-year-old was
acquired for $30 million. I just find it fucking hilarious. It's awesome, not
in some dipshit "American Dream" sort of way, but in the "holy shit, this
world is on crack" sense of it. I say, go him!

The next time I am looking for work I am seriously considering getting rid of
the resume and coming up with a bullshit startup name. It's pretty ridiculous
that my "acq-hire" value in a startup with a bullshit product would be about
50 times the market salary for someone at my level of skill. (I've seen enough
inside numbers to know that this is not an exaggeration. Acq-hire values are
$2-4M for mediocre engineers and $4-10M for good ones.)

One could do major social-proof arbitrage by offering cuts (of future acq-
hires) to people in the tech press. I am dead-fucking-sure this is already
happening. It must be. The stakes are too high, and the players too
degenerate.

On to the main point: yeah, it is terrifying that large corporate cultures are
_that_ desperate for innovation. I feel like they suffer the same problem as
command economies. The natural information-theoretic incompetence of central
authorities makes them slow to respond to anything (including especially their
own creeping obsolescence, for which they compensate by purchasing external
talent at extreme prices) but overreactive once they do.

~~~
robomartin
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.

~~~
michaelochurch
_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.

~~~
ProblemFactory
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.

~~~
wwkeyboard
_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.

------
OGC
A point or question missing from the article (i think): So, downloads for a
free app are essentially a competely empty metric?

------
swartzrock
From his own quoted post: "I lived through 8 years of a non-reading president
along with everyone else. I know that the brogrammers out there are constantly
getting texts from their buddies to plan the weekend's broactivities..."

Thanks Professor, now I don't have to continue reading your post – ie, you're
kind of a jerk.

~~~
emin_gun_sirer
Do you know which president I had in mind? I lived through quite a few 8 year
terms, and yes, that includes Reagan.

If your response is "but everyone knows which president you were referring
to," then surely it's fair game to refer to whoever that is since the facts
are universally accepted? :-)

~~~
richardjordan
The comment thread is only just getting started and there are already two
comments about why they didn't bother reading. The TL;DR generation has
another skill - finding ways to rationalize why they didn't tax their brains
with the effort of reading. Mostly they're of the format "I read x in the
first few lines so it disqualified the rest of the article from further
attention".

I think there's a new qualification for TL;DR - DFIAT - didn't fit in a tweet.

------
azm1
The point is to dig up something cool in the vast universe of information and
actually deliver it. It is nice there are friends and university Professors
who knows about this certain technology way deeper but can they _really_
deliver ? Sure, they will teach other kids and those kids will teach others or
maybe going to be employed at some tech company. This kind of success is just
more potent a visible. It really depends from what angle you look. This guy
has financial, educational and social success. From standpoint of the startup
culture, I think he's done very well. Anything can be judged only by
comparison to something else.

------
alexvr
As a fellow 17-year-old, I have nothing less than respect for Nick. You're
obviously doing something right if you sell your company for $30M before
you're an adult. Who cares if he's not an AI researcher? The scholar who wrote
this article can't bash this kid's product until he actually builds something
useful. If he came up with a revolutionary AI theory, great. But the people
who take an experimental idea and see the value in it are the people who
change the world. Einstein came up with some good theories, but nobody will
remember his name when someone uses the theories to create a time machine.

Are we going to ridicule Tesla Motors for making (highly innovative) cars
because they licensed the steering wheel or navigation system from another
company?

~~~
dombili
> The scholar who wrote this article can't bash this kid's product until he
> actually builds something useful.

What kind of logic is that?

~~~
WalterSear
17-year-old logic.

