
The Summly deal makes no sense - thomseddon
http://philosophically.com/the-summly-deal-makes-no-sense
======
kyro
For some who need perspective:

Right now, somewhere in the world, a child is being born into an uberly rich
family. That child will grow up to inherit millions for absolutely no work.
He'll live the good life full of yachts and private jets.

Right now, somewhere in the world, there is a party happening full of gorgeous
wealthy people who need not lift a finger to attain the luxuries that they
have. Their success is only a matter of genetics and luck.

Right now, somewhere in the world, is an investment banker who is making
literally millions after clicking a few buttons and making a few phone calls
to a few friends. He knows the right people and is in the right place, and
that's all that matters.

Right now, somewhere in the world, is a 20-some year old guy who is worth
billions because of a website he started. He was born into a family that sent
him to the right high school. He then went on to one of the best universities
in the country, built his website, moved, met the right people, and raised
$500+ million in funding. He and likely generations down the line are set for
life.

Right now, somewhere in the world, is a 17yr old teenager who started a
company with some money from his parents, built a product, with help from
friends and family, and got acquired for $30 million.

There's always someone becoming richer than you for much less work, every
second of the day. Look past that and just keep working. I get down about how
unfair that is from time to time, but there's nothing you can really do about
it, other than focus on your work.

Edit: Others are asking where in the article is jealousy mentioned. It isn't,
but I took the entire post as one rooted in envy and bitterness. There
certainly wouldn't be any of this type of reaction had the guy been a 40-year
old who finally got acquired after years of failed attempts. If anything, I'm
sure people would be applauding him and the whole affair.

~~~
chatmasta
Where did the article make any mention of jealousy or bitterness (other than
the "hurt feelings" of Yahoo's engineers)? The article describes the stupidity
of this acquisition from a business perspective.

The fact that your comment has received the most upvotes indicates that people
generally agree with your sentiment that nobody should be bitter or jealous.
Yet nobody is suggesting any bitterness or jealousy... So who exactly is this
directed at? Hey HN... I think you're "projecting." :)

~~~
res0nat0r
Simply because of the fact that in the first sentence that it mentions that he
is 17 years old. Companies get acquired all of the time every day, but those
don't warrant posts on HN mentioning how young the employees are. Hence the
jealousy.

~~~
jetti
Because there is a fact mentioned that is out of the ordinary compared to
other acquisitions, that makes it jealousy?

------
IanDrake
Right after college I started consulting at an eCommerce company that had
bought a 17 year old's website for over 1M. Had had built a gaming community
site that had become very popular and they wanted the traffic.

I thought the kid was just lucky until I was in a meeting with him. His
thought process basically ran circles around everyone else in the room, some
twice his age. I realized then, that there are kids, KIDS!, much smarter than
I'll ever hope to be in my life.

Sometimes you have to meet these people to believe they exist.

~~~
xradionut
As a counterpoint, there are real sharp people of all ages. At local meetups,
I've met a couple of retirees not orignally in the programming field, (medical
doctor, aerospace tech) that have picked up Linux and programming well enough,
I'd hire them to build software/hardware for me if they weren't pursuing their
own projects. Or the older opera singer that helped me debug code while on a
flight and joked, "Programming is music for those that can't sing...". I
believe she could succeed in any field, scary, scary, scary smart.

~~~
vijayr
In one of my projects, two of my team mates were in their mid forties. One of
them was a mother of two (pointing this out because she didn't have lots of
free time to learn new stuff). She didn't know Java, but she was probably a
million times smarter than the rest of the team (4 more people, all in their
early to mid twenties) _combined_. She didn't go to college, while the rest of
the team came from pretty good schools, with good grades etc. Yet, she picked
up things faster than any of us.

So yeah, some people are just sharp by nature - just like some people are
cute, strong etc (not saying others can't develop, but it does give the
"naturals" an advantage)

------
rdl
It's possible it's a big top line number (some press quotes even higher than
$30mm), but in a way which actually makes sense.

Long earn-outs could be one factor. Giving engineers $1mm with 1/2/3/4 4-year
earn-outs would even be on the low side. Doing the same with a founder would
obviously be worth less (especially at Yahoo!, given how founders historically
leave after acquisition)

SRI is presumably getting a big chunk for a new license. Maybe even a domain-
exclusive license. That alone could be $0-100mm.

If it's equity, it is a lot better for Yahoo!

It's possible the founders and key employees have a weird incentive structure
-- if they continue with the product and get 50mm users, they'd get a payout
of an extra $10mm vs. otherwise, for instance. That kind of thing could add to
the reported deal figure without adding much risk to Yahoo!. (I'm sure I could
get a "if you turn Yahoo! into a $60b/yr business in the next 3 years, you can
have an extra $100mm" on any deal.)

I'm not Marissa Mayer's biggest fan, but I don't think she's in the same vein
as the previous leadership at Yahoo!, so presuming that they're throwing money
away irrationally isn't the first thing I'd do.

------
jval
I feel this would be an appropriate subject for a Dilbert comic. Storyline is
that someone accidentally left the dot out of $300000.00 to make it $30000000
and then everyone else went along with it for fear of looking stupid.

~~~
justanother
A decimal point? I always mess up some mundane detail!

~~~
unclebucknasty
That movie should be required viewing for all ninth grade students. It's a
more realistic depiction of the life for which they are being prepared than
most of what they are fed.

------
mtoddh
From the article,

 _Let's ignore the hurt feelings that our employees will have about making a
17 year-old a millionaire._

The price tag for this company aside, am I the only one that detects a hint of
jealousy in some of the comments that seem to imply "but he's too young to be
a millionaire!"?

~~~
JPKab
As someone who isn't remotely jealous for the kid (I'm happy for him
actually), let's not pretend that he is an innovator. It's a link aggregator
app, no different than pulse or others. In fact, the difference from Pulse is
that its inferior, because it displays far less at a time. But that is my
opinion, and I'm sure a lot of older folks like it better BECAUSE it displays
less.

Kid: Go for it dude, and good luck.

Yahoo: WTF?? Why not just build your own version of this?

~~~
cbs
_let's not pretend that he is an innovator_

C'mon, this can't be the first time you've noticed that "innovation" has been
overused to the point of meaninglessness in tech. "Disruption" doubly so.
Don't harp on this kid, he is no less innovative than 95+% of "innovation"
I've heard about in the last year.

------
scholia
Last year's press release had quotes from Daniel Ek (Spotify) and Mary Meeker,
and said:

"Summly is backed by several investors, including Horizons Ventures, Ashton
Kutcher, Betaworks, Brian Chesky, Hosain Rahman, Joanna Shields, Josh Kushner,
Mark Pincus, Matt Mullenweg, Stephen Fry, Troy Carter, Yoko Ono and many
more."

Not exactly a teen-programmer-in-mother's-basement story...

~~~
wangarific
Yahoo just paid $30mm for an unknown technology and a fresh face to parade
around, they would appreciate it if you didn't start poking holes in the
narrative.

Thank you

~~~
huhtenberg
Actually it now looks more and more like some sort of elaborate kick-back
scheme for the investors. "Your YHOO stock has sunk below the waterline, so
here's something to sweeten the pot."

~~~
tixocloud
I actually think this kinda makes sense. That or relationship building with
the investors. Plus, Yahoo! hasn't been making any new waves for quite a
while. They needed to make something happen somehow to get people excited.

The founder might be brilliant and I could be wrong about this whole
relationship building with investors to try and get attraction nonsense.

~~~
corresation
_Plus, Yahoo! hasn't been making any new waves for quite a while._

They've been making tonnes of Marissa Mayer waves. They're the New York Jets
of technology.

------
minimax
In 2005 Yahoo buys Delicious, a bookmarking site, for between $15MM - $30MM.
Summly was acquired for a reported $30MM. Delicious had 5MM users, and let's
face it how much "CS beef" goes into a bookmark sharing site. Summly claims to
have 1MM downloads. The difference between Delicious' 5MM users and Summly's
1MM is a factor of five but the order of magnitude is roughly the same. Joshua
Schachter is highly respected as an entrepreneur and engineer within the HN
community, but Nick D’Aloisio is considered just some lucky teenager.

The jealousy on display in the post and subsequent comments is, I think,
glaringly obvious to anyone who would take a second to compare it to almost
any other startup acquisition where the founder isn't a 17 year old.

~~~
ebbv
I think the assumption is, rightly or wrongly, that the 17 year old kid is
unlikely to have done anything the rest of us couldn't have done. Whereas if
he were an older more experienced developer, he would get the benefit of the
doubt that maybe he had special something on offer that was worth Yahoo
buying.

At least, that's what's going through my head.

EDIT:

If the assumption that the Summly codebase doesn't actually contain anything
worth $30 million is true, then this purchase is all about branding. It's
about fooling Wall Street into thinking Yahoo is revitalized and focused on
new technology and talent.

When IMHO, in reality, any sane investor should see this purchase as evidence
that Yahoo is acting irrationally and I'd pull every dollar I had out of it.

------
t4nkd
Unless I missed a particular story, I haven't seen Summly or Yahoo! announce
the number _is_ $30m. A reasonable point here was that relicensing from SRI
for the core functionality of this app could be a large part of the purchase
price. Also, not being totally familiar with taking VC money, it sounds
reasonable to me that a significant portion of the monies is going back to the
investor(s?).

While I think $15m would have been fine and generous, it doesn't shock me that
someone important in Yahoo! got it stuck into their head that Summly was
hitting on something that would "change the way people use news", a
particularly neat fit if their intention is still to be the new homepage of
the internet.

------
pisarzp
I kind of agree with the author. Have I been engineer in Yahoo, I would ask
myself question "Why is he paid so much, where we could do it in house better
and spend this money on bonuses for employees?". Especially given that fact,
that Summly doesn't even own this technology just licences it from SRI.

The only explanation I see, is that what Yahoo actually really bought is the
great licensing deal (flat fee? exclusivity?).

~~~
jimfl
Yahoo! engineers probably could do this. Yahoo! middle management not so much.

------
danso
Can someone comment on whether this is a reasonable amount of money to pay for
talented engineers and some patents? As a service, the deal doesn't make much
sense...it doesn't seem that the world is hungry for ways to simplify web
content, even if the technology actually worked. The most popular articles on
most news sites are popular because of their in depth content or because they
are slideshows of arousing photos. Summly would appear to not really affect
either of those trends

~~~
smackay
Perhaps it is a signal to the marketplace, either to other startups or to
investors that Yahoo! is rejuvenating itself (or at least is trying to),
moreso since it is an acquisition outside of Silicon Valley.

~~~
wavefunction
What sort of signal though? Other than the mainstream media, pretty much
anyone else with at least a clue seems to be confused by this acquisition.

~~~
easytiger
well how much does it cost to get your company name on the front page of every
tech site without allowing a massive data breach

~~~
tbomb
I'd guess less than $30 mill?

------
amirhhz
There's a possibility that this publicity changes younger people's perception
of Yahoo's. They'll see the BBC headline and a) will now know what Yahoo! is
and b) might get motivated to write/learn code and even want to go work for a
tech company (even Yahoo itself). Combined with everything else Marissa Mayer
is doing, (b) might actually happen, as altruistic-seeming as it might sound.

~~~
csmattryder
I'm 21, probably out of the definition of 'younger person' by a while, but
even I don't get it.

$30m is a lot for what I assume is an application of SRI's technology. Still
seems to me like Yahoo! is a place where engineers are handed the purse
strings, a la 2005 era.

~~~
ecspike
I'd say so, Marissa Mayer was an engineer before becoming an executive.

~~~
corresation
_Marissa Mayer was an engineer before becoming an executive._

Was she? Her career essentially started at Google, her rise arguably being one
of right place/right time.

For all of the talk about Mayer, I have literally never heard about anything
actually interesting that she has done. Instead it's her 90 hour work weeks,
_n_ -shades of blue, and abrasive attitudes with others. She sounds like
management through and through.

------
rayiner
This article assumes that the primary goal of the acquisition is the
technology. Without having looked at the technology or commenting on its
merits, I can think of a boatload of other things Yahoo is buying with its
money:

1) Free positive publicity--publicity that doesn't constantly remind people
how Yahoo! is circling the train; 2) The recruiting hook of "yeah, we're not
stodgy anymore, we paid some kid $30 million!" which will fly with some
people; 3) A new engineer who obviously has both technical and business
skills; 4) A subliminal "don't forget, there's more of you turning 18 every
day" to the rest of the organization.

~~~
mgkimsal
#2 - "we paid some kid $30m!" Why on earth would that be used for
'recruiting'? Getting me to come be your full time employee by telling me how
much you pay outsiders (sometimes for lame tech)?

If Yahoo wants to increase their recruiting power, start rewarding - publicly
- internal teams that innovate. Start a $50m innovation fund, and reward
internal teams for demonstrating initiative, problem solving, innovative
solutions, bold new idea, etc.

~~~
maxbrown
I really like this. Why don't more companies do this? Is it better in theory
than in practice? Maybe it creates too competitive of an atmosphere?
Curious...

~~~
danielweber
Most companies think they have already bought your ideas.

------
niggler
"The craziest thing is that there are a lot of really qualified, CS-beefy
teams doing really amazing things in the mobile news/discovery space these
days"

That's true of most of these acquisitions. There are a lot of qualified people
doing crazy things, but the smartest people aren't always the ones who win.
That fact is immaterial here until we find out what other things they got
(maybe the kid brings along investors who may buy more yahoo stock ?)

I do agree, in general, that as a public company Yahoo has to explain to
shareholders why they made the acquisition.

------
dhannum
Summly has no real history to speak of, but Yahoo clearly has a long, sad,
sorry history of overpaying for little nascent startups, failing to capitalize
on them and then eventually letting them fall apart while missing out on
larger trends.

At first it seems that whether or not this deal makes sense to you depends on
whether or not you're a shareholder of Yahoo or a shareholder of Summly. But
keep in mind that if Yahoo didn't make a similar deal with ViaWeb a decade ago
there may not be a YC or any of the companies they helped start.

------
giffo
They might have picked this company up because its news,

"Yahoo" buys "17 wiz kid" "mobile app and company", is good advertising around
the world, yahoo is now a company who buys the "latest" technology, they hired
a wiz kid - they have him on board he will do crazy technology experiments -
"you have no idea what he could come up with next!", and they have his
technology that a company as big as yahoo would play $30m for.

It tells potential users and more importantly investors and current
shareholders it is now company who buys stuff because its investing and
changing for the better and maybe people should change their views about yahoo
etc etc.

note: I have not used the app, still don't care about yahoo.

------
sdfjkl
Good point about "ignore the hurt feelings that our employees will have". Now
a bunch of Yahoo(er?)s have this kid sitting in their Soho office with a £17m
price tag on his sleeve - that's got to be a little awkward for everyone
involved.

~~~
ecspike
It's only awkward if you are carrying around a big ego. I've joined places
just after acquisition and had co-workers who were worth millions as well.
It's really not a big deal.

~~~
orta
He's not got a good reputation for communication:
[http://gizmodo.com/5830076/how-i-made-a-15+year+old-app-
deve...](http://gizmodo.com/5830076/how-i-made-a-15+year+old-app-developer-
cry)

~~~
cbr
Two and a half years could mean a large of increase in maturity at that age.

~~~
kybernetyk
With 17? Hardly.

~~~
hmottestad
Wait til you are 60. Then you will start saying "With 25/30/35 hardly".

He just sold a company at the age of 17 to a huge corporation for a truck load
of money. Unless he's got loans up to his ears I reckon he must be a lot
smarter at business than I am.

~~~
kybernetyk
> Wait til you are 60. Then you will start saying "With 25/30/35 hardly".

Most certainly I will laugh at my naive 30year old self. But that doesn't mean
I'm not allowed to reflect about maturity levels of teenagers.

> He just sold a company at the age of 17 to a huge corporation for a truck
> load of money. Unless he's got loans up to his ears I reckon he must be a
> lot smarter at business than I am.

Well, I don't want to come off as a too negative but word is that his parents'
money helped at least a little with generating Buzz. Now nothing against that
- he used every possibility he had. But don't call yourself bad at business
when you don't have that kind of resource available to you. With the right
connections you can sell a bunch of photo filters for $1 billion nowadays. And
without you have to work off your ass to become ramen profitable.

------
fleaflicker
I once heard Joshua Schachter describe this kind of acquisition by a public
company as "somebody in corp-dev falls in love with your product and has to
have it."

In other words, it's not repeatable. This is nothing new. It happens all the
time.

~~~
arbuge
Quite so. In the real world, things don't always have to make sense for them
to happen. That counts for both good as well as bad luck.

Counting on luck, of course, is not a reliable business plan. Whether these
folks deserved all the money they got or not is really a moot point - your
best shot at success remains to put yourself in a position where you deserve
it. You may still not achieve it, or you may grossly overachieve it, but still
the best way to go overall.

------
rdouble
The Summly deal makes sense as much as any Yahoo! acquisition over the years
has made sense. Yahoo! is a frankenstein of almost 2 decades of acquisitions.
If the CEO of this particular acquisition wasn't a teenager, nobody would bat
an eye at $30M for this company.

------
aheilbut
You haven't considered the simpler possibility that what has been reported is
significantly incomplete and/or BS.

------
mortdeus
I read in forbes that this kid was supposed to write a machine learning search
algorithm that would slay the titan google beast and bring balance back to the
ad force.

The moral of this story? Invest in the opposite of what Forbes says will go
do.

------
nicholassmith
It makes perfect sense, they've got some technology out of it, some people who
understand mobile, and a nice big headline.

Worth $30m of _my_ money? Probably not. Worth $30m of _Yahoo's_ money? Maybe,
they're not likely to have decided to spend that much on an acquihire without
board approval really are they. Unless they Zuckerberg'd it and thought it was
better to seek forgiveness.

~~~
alex1
The summarization tech isn't owned by Summly. It's owned by SRI International
and was licensed to Summly. Maybe a large chunk of the reported $30 million
was actually used to acquire that technology from SRI?

~~~
hdra
I actually didn't know about this before. I think one of the first article I
read about the product was the story when the product was called TrimIt, and
the company just received some investment from Li Ka Shing. For some reason,
the articles[1][2][3] gave me the impression that the technology was developed
by the founder (or did they switched the algorithms?)

[1]: [http://www.forbes.com/sites/parmyolson/2011/12/13/teenage-
pr...](http://www.forbes.com/sites/parmyolson/2011/12/13/teenage-programmer-
backed-by-hong-kong-billionaire-li-ka-shing/) [2]:
[http://techcrunch.com/2011/07/15/trimit-summarizes-emails-
bl...](http://techcrunch.com/2011/07/15/trimit-summarizes-emails-blog-posts-
and-more-with-a-shake-of-your-iphone/) [3]:
[http://gigaom.com/2011/12/13/meet-the-internets-newest-
boy-g...](http://gigaom.com/2011/12/13/meet-the-internets-newest-boy-genius/)

------
lifeisstillgood
Oh. come on. I would kill to make an app as nice as this, even if it did not
sell at all.

Kudos to the kids for actually making a product people wanted to use, and at
least one person wanted to buy.

------
mortdeus
$30,000,000 to make yahoo relevant enough to be discussed on hacker news? Ehhh
I think they got their money's worth.

------
Mc_Big_G
...except that Yahoo just got $30 million worth of controversial press.

------
PaulHoule
People are on the threshold of really good text analysis algorithms. I know of
teams all over the place who have bits of the puzzle solved amazingly well.

SRI is a world leader at this technology, it already spun off Siri to Apple,
and they've got patents on key technologies in this system, so a $50 M
valuation is about right.

I know another guy from New York who sold a company of the same size for $30 M
or so and when I wargame scenarios around companies developing this kind of
stuff I'd expect an exit between 20 M and 80 M.

~~~
foobarqux
I don't think anything was acquired from SRI except a license.

------
smnl
I'm confused why they decided to immediately remove Summly from the App Store
rather than use it to drive traffic to other Yahoo apps - anybody know why
they did this?

------
itsprofitbaron
Normally whenever an acquisition happens, I avoid these types of posts on HN
because there are often people in the comments (and even in the posts
themselves) calling out the acquired company saying “I could have done this”
or “Acquirer could have built Acquired Company in a day” but, this one
deserves a reply.

The reason why this deserves a reply is that the OP’s post does not really
contain any facts rather, it contains assumptions (either the OP’s assumptions
or others).

For instance:

    
    
       “Yahoo screens the employees, and tells the founder that 2 of them passed” 

AND

    
    
      “Summly says dang, only 2 out of 5 passed?”
    

The article the OP links to, to cite this actually states[1]

    
    
      “In addition, only two of Summly’s employees will go to Yahoo with D’Aloisio”
    

There is no mention of anyone failing a ‘test’, all it states that only that 2
of Summly’s employees will be joining Yahoo alongside the founder. Now when
OMGPOP were acquired by Zynga, one of their employees didn’t join Zynga[2] and
that employee chose not to join Zynga – the same may have happened to Summly’s
other employees as well (something that we do not know).

Moreover, the OP calls out Yahoo for acquiring Summly for $30M and citing
that,

    
    
      “Summly says no, $50m is our minimum. We need to pay back our generous investors”
    

However, there has been _no_ confirmation of an acquisition price – there are
_rumours_ which place the amount in that ballpark and _rumours_ which say the
price was 90% cash. Now, when startups get acquired, they do not get acquired
for one price (as Media outlets etc will report) rather, amongst other things
there’s an earn out for employees/founder(s) and money to cap table. These
things are often complicated and can be very complicated which is why, I am
not criticizing media outlets for reporting a single price – in particular
these Media outlets love the “millionaire” stories because it gives them a ton
of page views - although, when someone is calling out a company for selling
for an _unconfirmed_ price by, saying that it is ridiculous – these things
need highlighting.

Likewise, the OP concludes with:

    
    
      “The craziest thing is that there are a lot of really qualified, CS-beefy teams doing really amazing things in the mobile news/discovery space these days - and that would definitely take a $30m acquisition offer or less. I don't really understand why they picked this one”
    

First of all, as I already highlighted no one knows that Yahoo gave the people
at Summly a test – and if they did, if the employees who are not joining
either rejected the role or failed the test. Likewise nor do we know an
official price for the company of which flaws I already mentioned in regards
to a single price.

However, what we do know is that Yahoo acquired Summly (which is shutting down
although, some of it will be incorporated into Yahoo)[3] and regardless if you
agree with it or not, they acquired them for a price which is suitable to
Yahoo and Summly's investors/team.

Either way, I wish Nick D’Aloisio and the rest of the Summly team all the best
and congratulations on your exit to Yahoo.

[1] [http://allthingsd.com/20130325/yahoo-paid-30-million-in-
cash...](http://allthingsd.com/20130325/yahoo-paid-30-million-in-cash-
for-18-months-of-young-summly-entrepreneurs-time/)

[2]
[http://www.gamasutra.com/view/news/167244/Turning_down_Zynga...](http://www.gamasutra.com/view/news/167244/Turning_down_Zynga_Why_I_opted_out_of_the_210M_Omgpop_buy.php)

[3] <http://ycorpblog.com/2013/03/25/yahoo-to-acquire-summly/>

~~~
Evbn
Most of your comment is reasonable, except for the part about a reasonable
price for Yahoo. There is no evidence that Yahoo isn't suffering a costly
mistake (or worse) from a small group of decision makers on this deal.

~~~
itsprofitbaron
I said that the price is suitable for Yahoo because, if they did not believe
that the price was acceptable to Yahoo and its shareholders then, they would
not have sanctioned an acquisition for the company. Likewise, I think your
comment about there being no evidence to support the acquisition etc is a
valid one although, it could be applied to any M&A deal such as it could have
been applied (at the time) to Google’s acquisition of YouTube (with regards to
the lawsuits etc) - and whilst the Summly deal may or may not end up being
successful for Yahoo, if the Summly Team provides Yahoo with value beyond
their acquisition price then, it certain cannot be debated that it was
anything but a successful one.

------
_chrismccreadie
I suppose Yahoo will have to answer to their shareholders, just not yet. It
seems to me that they have invested in the talent and the current customer
base. If Yahoo really do make an impact on the mobile news market I'm sure
$30m will seem like buttons.

I do agree that many other development teams would have jumped at an
acquisition offer of a lot less money but they were either unknown to Yahoo or
deemed not suitable for Yahoo.

------
robmcm
Summly and Autonomy aren't the bet poster boys for Britian's software
developers.

------
trotsky
When the number sounds way too high and it's from a single anonymous source
and no one else is talking - it's often a lie. People have big egos.

~~~
patrickskim
What's the point? Doesn't the truth come out eventually? Yahoo is a public
company, their financials aren't exactly secrets.

~~~
trotsky
Public companies have great leeway in how they present transactions. You
aren't required to divulge M&A details, and they often won't be below a
certain level.

------
lmirosevic
My first reaction was that this was a play by yahoo to get in on the
newsreader market. There's been a lot of fanfare about google abandoning its
RSS reader so obviously this is a big market, one to which Google doesn't
think RSS is the answer. So what is the answer? I don't think anyone knows but
it seems to me like yahoo is taking a bet on summly. Plus it's a great
opportunity to capitalise on the press and general sentiment of the whole
Google RSS story. And finally Marissa is new, and a lot of people are probably
pointing their eyes at her to see if she can turn around yahoo; and what
better way to do that than to win a game of chess against Google?

Edit: and if Marissa does get a lot of faith from investors, which she will if
one of her first moves is a victory against google, then her reputation will
undoubtedly rise. And how much is the reputation of a CEO worth at a multi
billion dollar company? I think a lot more than $30M. Just look at Apple's
recent stock movement.

------
kadaj
Truth be told, the deal is bullshit.

------
nns1212
Pulse is getting purchased for over $50 million by LinkedIn.
([http://gigaom.com/2013/03/11/linkedin-reportedly-buying-
news...](http://gigaom.com/2013/03/11/linkedin-reportedly-buying-news-reading-
app-pulse-for-over-50m/))

Summly is much better than that as far as technology is concerned.

Yahoo got a better deal.

------
brown9-2
These things are a lot easier to understand once you realize that to the
acquirer, the publicity is a part of the deal as well.

Plus, it's not all that common for senior management to face any sort of
punishment for acquisitions that go bad.

------
31reasons
> I don't really understand why they picked this one.

Yahoo Executive: "Don't Make Me think"

Summly: Ok. 30 mil

Yahoo Executive: OK.

------
harel
Good on him. Doesn't matter if it makes sense to us (it doesn't to me but hey,
its not my money!). The kid got minted, his employees probably got a good deal
out of it, his mum must be proud as punch. All in all, congratulations kiddo,
don't spend it all at once.

What baffles me most though, is that Yahoo would conduct a CS type interview
to the employees, failing some of them in the process (if that bit is true). I
have over 16 years of real hard world experience and I would never dream of
passing a CS type exam. Is that really a gauge of excellence?

~~~
dirtyaura
Of course Yahoo will do at least similar level interviews for expensive
acquihires as to their normal hires. It's a standard practice, Google does
this too. They are looking to acquire people that fit to their culture and
standard interviews are their procedure to try to ensure that.

I'm personally of the opinion that a little bit of diversity (more designer-
type front end devs without academic background) would do good for Google's
(or Yahoo's) internal culture, but if they have decided that they only want CS
people, it totally makes sense to interview acquihires too.

------
ck2
Who actually confirmed the $30M number though?

No-one that I've seen quoted?

Maybe it was $30M in stock?

~~~
k-mcgrady
It's not and probably won't be confirmed but 'sources' are saying $30m with
90% in cash and 10% in stock. I can't remember which site had the sources (it
might have been WSJ).

------
fruor
To put your question more into perspective, I would ask if paying $50 for
something that only costs $10 to manufacture, makes sense? Anyone who runs a
profitable business will say 'yes'.

Summly is a product, and as such, has been purchased for more than it cost to
"manufacture", as you laid out.

$30M is bargain shopping; lest we forget "Draw Something" was bought for $180
million, or "Instagram" was purchased for a whopping $1 billion.

------
plinkplonk
So what happens to the three employees who didn't clear Yahoo's interviews? Do
they get nothing? Just curious.

------
tangledweb
Ignoring this specific deal, mull on this hypothetical.

Imagine you are a young superstar who with some justification believes you
have the world at your feet.

A bloated, cadaverous company that your dad tells you was cool when you were
in preschool wants to buy you and tether your career to them.

How much would it take to convince you to do that?

------
chuhnk
Where is this information coming from? Is this back and forth a fictional tale
or actually what happened?

~~~
zenocon
Same question -- how does this individual know that their team only passed 2/5
interviews, and what the back and forth negotiations were. It seems to me
they're either making this up, or they are sharing info that I'd guess is
going to make Yahoo fairly annoyed.

~~~
objclxt
He's surmising it from the AllThingsD story, which states only two of the five
employees will be moving to Yahoo.

That doesn't _necessarily_ mean the other three failed the interviews - maybe
they don't want to work for Yahoo.

~~~
senthilnayagam
If indeed 3/5 developers rejected yahoo offer, that's a PR nightmare

------
disclosure
"I've got 30 billion, I guess 30 million is not too much to ask for. Do it." -
Li Ka-shing

------
MMXII
Seems to me that the kid has connections if you look at investors and business
partners.

Maybe those partners wouldn't have wanted to collaborate with Yahoo, but now
they'd consider it for 30M.

------
akristofcak
At the risk of stating the obvious, big companies overpay for deals all the
time especially when there is some perceived intangible benefit to be accrued.
Alas.

------
marknutter
Summly has had a ton of buzz since it was first announced and that's saying
more than, oh, every single product Yahoo has come out with in the last 5
years. I think Yahoo wants to inject some of that young and naive but
optimistic joojoo that the Summly founder embodies into the company. Maybe
this will light a fire under some of the old guard's asses and get them to
work on Yahoo side projects in their spare time.

------
hmottestad
Everyone now knows about this app. For $30000000 they pulled off the best
marketing campaign ever.

~~~
jonknee
To be fair, $30M could have kicked off a hell of a marketing campaign. Imagine
watching 10 Super Bowl ads in a row... Talk about "everyone" knowing about
something.

------
porker
Any open source equivalents to Summly's "pure rocket science" summarization
technology?

~~~
nshm
Good discussion on this subject here:

[https://www.linkedin.com/groupItem?view=&gid=131222&...](https://www.linkedin.com/groupItem?view=&gid=131222&item=ANET%3AS%3A214661120)

And here

[http://www.quora.com/What-are-some-good-open-source-text-
sum...](http://www.quora.com/What-are-some-good-open-source-text-summarizers)

The best candidate is MEAD

<http://www.summarization.com/mead/>

~~~
porker
Thanks!

------
k__
Buying the Justin Bieber of Software Development for $30,000,000?

Seems like a good deal to me

------
naunga
You know if the kid really wanted some press for his app...he should have
turned down Yahoo's and state that he values his company too much to allow
them to be used as a PR stunt.

...and then the dump truck full of money pulled into his drive way.

------
askimto
Maybe they got some real nice licensing terms from SRI.

------
L0j1k
What I read in this piece of news (though not really any article in
particular) was: "Yahoo spent 30 million to attract the attention of high
school kids"...

~~~
cududa
Is there anything inherently wrong with that? After High School I had my pick
of tech companies and projects to join. And frankly, a good position in yahoo
working with someone like Nick and Marisa Mayer seems pretty fun to me.

~~~
L0j1k
I don't know and truthfully, I don't care. I'm not in high school, after all.
Nor am I a shareholder of Yahoo.

------
Evbn
The problem in a nutshell: Yahoo just indirectly but clearly told all their
talented employees to quit and try to get acquired back. (The untalented
employees know they have better expected returns if they just chairwarm for a
few years.)

Bad for Yahoo.

------
workbench
Never really understood why Summly got so much press to begin with.

Isn't it just Flipboard with a slightly different UI

~~~
jwmoz
Agreed. I played with it once. Lack of decent content. Summaries sometimes not
great. UI too simple. Flipboard is far better.

------
camus
I say good for him. It is a PR deal.Wether it is a good deal or not I dont
know,i'm not a yahoo's shareholder,but good for the guy.Congrats to him.

------
thiagoperes
Let's say you're Yahoo:

You're making a huge effort towards mobile, with no apparent success.

You see a small team that built a great product, that fits mobile nicely and
that has a huge user base. BTW, You have a lot of money.

A 17yr old boy did something that lots of highly skilled engineers, managers,
designer couldn't do, and that you pay a lot of money.

If you have the chance to acquire a great product with a huge user base,
wouldn't you do it (being a company like Yahoo)?

\--------

That's the same as the Instagram deal. Huge companies are not succeeding in
mobile, but they need to do this right and create a mobile presence. If it
costs "only" 30m, it's a great deal if you ask me.

~~~
mikecane
>>>A 17yr old boy did something that lots of highly skilled engineers,
managers, designer couldn't do

Well, that might be stretching. As Comments elsewhere have pointed out, in a
large corporation the very same idea might have been done and shot down
internally. There might be a few people at Yahoo going, "Wait. WTF! That's
what we showed them last year! And it was better!"

