

The 17-Year-Old That Yahoo Paid $30M Was Licensing His Startup's Core Technology - esalazar
http://www.sfgate.com/technology/businessinsider/article/The-17-Year-Old-That-Yahoo-Paid-30-Million-Was-4388011.php

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richardjordan
Well, I said just yesterday on a thread that I hoped someone would do a follow
the money in this deal as there's a lot that's strange about it. Doesn't mean
that there's necessarily anything nefarious but it does mean that of we live
in an age where investigative reporting is not completely dead it makes sense
for someone to at least poke around this a bit and find out all the details.

Yahoo doesn't get the technology from the transaction (summly doesn't own it).
Yahoo doesn't get any particular talent on the transaction (there isn't a team
of tech wizards they're buying for that 30million). They're not getting a huge
number of users (tons of apps have a million users - still a drop in the ocean
on Yahoo's own user numbers). So what is this deal all about?

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brudgers
There's a million users, and then there are a million users...Summly isn't a
flatulence emulation app for smartphones and their users are probably more
valuable, e.g. they consume written news. What news they are interested in may
also be valuable as business intelligence.

~~~
richardjordan
I suspect on a given day there are many HN readers with apps with a million or
more downloads who aren't getting sniffed at... Looking at what this app does
it is not clear to me that this particular user base is especially valuable...

~~~
brudgers
If one ran a news portal, one's perception of the value of Summly's users
might be different.

Likewise, one's perception of the value of those user's selection among news
items might be valued differently than another user group's selection among
flatulence noises...particularly if one's revenue was anchored in advertising
as is the case with Yahoo.

To put it another way, assuming that Yahoo is run by incompetents is more
likely to be an error than its converse.

~~~
richardjordan
I don't assume anything. I don't assume Yahoo is run by incompetents. I don't
even think that incompetence is the best explanation for this.

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nlh
I have a question that's been bugging me for the past few days (threads ;) :

Has anyone actually _confirmed_ that Yahoo paid $30M? As in, seen an official
statement or reviewed the actual deal docs? Because as of now it seems like
the only actual source for that number is Kara Swisher on AllThingsD, and
that's her saying "sources tell her".

I ask because I wonder if one of the big twists in this story is that,
perhaps, Yahoo didn't actually pay $30M. Maybe they paid $10M. Or $1M. And
perhaps this whole shebang is a big, big PR blitz -- that's working
spectacularly.

Folks pay $2M for 30 seconds of Super Bowl ad time. This story has, so far,
gotten Yahoo a LOT more than 30 seconds of exposure. It's everywhere (my
extremely non-technical and non-nerdy biz partner emailed me an AP news link
this morning - he's my "masses" filter).

One question I have is - what would the consequences be if they did leak an
incorrect amount? I mean, would shareholders have a right to be upset? "You
leaked to the world that we paid $30M and in reality, we...we...got a better
deal? Oh. Cool."

It reminds me of a joke I have with some friends about an acquisition someone
did a few years ago. They announced the deal as being priced at "Under $50M",
and the news reported and celebrated this $50M acquisition. Now friends say
things like "I, too, happen to have Under $50M in my wallet at this very
moment!" ;)

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brador
His father is a VP at Morgan Stanley. Deal was done from day 1.

Stop over analyzing, it's not a regular startup, it's not playing the same
ballgame you or I play. No value was required. The usualy rules do not apply.

Daddy hooked his fish.

~~~
jiggy2011
Smart rich people typically don't get rich by just giving away large piles of
cash to the children of other smart rich people.

~~~
brador
Public stock money isn't from smart rich people.

~~~
jiggy2011
You think it was just straight embezzlement?

------
ary
Forgive me for having to ask this, but can anyone link me to a cogent argument
made here on HN as to why this particular story inspires so much fixation?
After the Nth front page story here I'm still having trouble understanding why
everyone is so wrapped up in it.

Supposedly the Spock-like logical minds of HN are immune to the wunderkind
mass media story hook; so what gives?

~~~
rayiner
Spock like what? HN is more like "Sports Fans" from SNL. This story is our
version of "should they have recruited LeBron straight out of HS?!"

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jonknee
... And if it was from SRI it means it probably didn't work nearly as well as
advertised. Even with Apple's help Siri is still a joke.

~~~
mikeash
Works well for me.

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citricsquid

        By the way: None of this is meant to take anything away from
        what founder Nick D'Aloisio did with Summly. That guy is a pure 
        hustler, and he earned every penny of his millions.
    

How can they say that after suggesting:

    
    
        Maybe Yahoo has decided spending $30 million to give one of 
        their disappointing startups a safe landing is a way to get on 
        their good side. 
    

If the deal was for Yahoo to gain favour with the investors (lining their
pockets; Nick cashing out being an irrelevant side effect) how on earth did he
"earn every penny"? If that is true then he was in the right place at the
right time with the right investors.

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ryanSrich
>"earn every penny"?

>"he was in the right place at the right time with the right investors"

What's the difference between these two?

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citricsquid
If you count his work as including acquiring the investors then I guess you're
right, that might explain the word "hustler".

If you count his work as being building the original application, creating a
brand and then being involved with the business that was sold then the company
being bought only because of the investors means his work was immaterial to
the sale.

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andrewhillman
This confuses me...

"The acquisition was led by Yahoo HR boss Jackie Reeses."

HR is leading investment decisions at Yahoo? I looked up this person and she
is based in New York and her title is EVP People and Development at Yahoo!

~~~
evan_
Makes sense if it was an acqui-hire.

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joonix
I like how the last sentence of the article completely contradicts all the
points made in the rest of the body.

~~~
richardjordan
Yes indeed. That was needless pandering so we wouldn't think they were trying
to be mean to a teenager.

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sakopov
This sounds more and more like everyone involved in this at Yahoo did zero
research prior to making this acquisition. Well, either that or Yahoo was
determined to kill any competition before possibly rolling out with a similar
product. Regardless, it puts Yahoo in an awkward position.

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keeptrying
What if this is just one big fuckup on Yahoo's part and they can't admit to it
because they'll look like idiots?

I.e. they somehow forgot to check the actual technology.

The more I read about this, the more I think this could be the case.

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msencenb
This is a pretty poor attack on a startup that managed to get itself acquired
for more than most of us will ever sell a company for.

As Peter Thiel says there are two kinds of companies: companies who go from 0
to 1 (SpaceX, Tesla, maybe Google) and companies who go from 1 to n
(globalization of technology).

Summly clearly fits into the 1 to n bucket, but so do a lot of other
companies. Would people be pissed if Github got acquired? I see no outcry for
a $100 million dollar round of funding for a company that is built upon open
source software.

How is github any different than Summly from a 'renting' of technology
perspective?

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18pfsmt
I almost down-voted you, but then I thought about it and I think you have a
point worthy of discussion.

The core of Github is open source, which allows for interoperability and
confidence, but what they have built on top is proprietary and community-
engaging. Just like managing email infrastructure, there is a lot of nuance
and domain expertise that comes from experience only. Come to think of it, it
seems a lot of open source technology is so loosely built (configurable/
flexible), that it requires serious expertise to actually run it.

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ed56
Really?

"Despite speculation on the Internet that Summly only licensed its summarizing
technology from SRI International, an independent research institute, Mr.
D’Aloisio said the technology was developed by Summly and that the company
owned 100% of the intellectual property behind the service."

[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/)

~~~
illuminate
Do they define licensed as owned (for this particular purpose)?

<http://summly.com/technology.html>

Summly's internal team partnered closely with SRI in building our app.

Innovations from SRI International have created new industries, billions of
dollars of marketplace value, and lasting benefits to society—touching our
lives every day. SRI, a nonprofit research and development institute based in
Silicon Valley, brings its innovations to the marketplace through technology
licensing, new products, and spin-off ventures. Government and business
clients come to SRI for pioneering R&D and solutions in computing and
communications, chemistry and materials, education, energy, health and
pharmaceuticals, national defense, robotics, sensing, and more. Visit sri.com
for more information.

"Summly came to SRI International with a core concept to solve the information
overload problem, which is especially challenging for mobile devices because
of their limited screen size," said David Israel, Ph.D., program director in
the Artificial Intelligence Center at SRI International. "Building on SRI's
expertise in machine learning and natural language processing, the Summly team
is creating a new type of content, providing understandable and relevant
summaries tailored for mobile devices."

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anigbrowl
_a new type of content, providing understandable and relevant summaries
tailored for mobile devices_

I'm waiting for them to patent it and then sue newspapers for using headlines.

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tdr
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house tech.

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reminder when ready

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

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fnordfnordfnord
Is this what some people like to call "killing it"?

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okor
Don't hate.

