
Yahoo Has Acquired Rockmelt, Apps To Shut Down On August 31st - floydpink
http://techcrunch.com/2013/08/02/yahoo-has-acquired-rockmelt-apps-to-shut-down-on-august-31st/
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orky56
For those keeping score, this gives another win for Khosla Ventures, SV Angel,
a16z, and First Round. Here's the tally for those who invested in companies
that have been acquired by Y! since Mayer took over:

CrunchFund - 3 (Stamped, GoPollGo, Tumblr)

True Ventures - 3 (OnTheAir, Snip.It, Lexity)

Khosla Venture - 3 (Snip.It, Xobni, Rockmelt)

SV Angel - 3 (Snip,It, Xobni, Rockmelt)

Google Ventures - 2 (Astrid & Stamped)

Spark Capital - 2 (Tumblr & Lexity)

Jack Herrick - 2 (Qwiki & Astrid)

Greylock - 2 (Tumblr & Qwiki)

First Round Capital - 2 (Xobni & Rockmelt)

Also to note, Lexity & Jybe were founded by former Y! employees.

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badclient
Other than Tumblr, it seems like all the other acquisitions were of companies
that were on their way down.

Edit: Also add Lexity to the list with Tumblr.

~~~
orky56
That doesn't seem totally fair. To say they were on their way down is pretty
negative. Sure maybe some of their explosive growth was slowing down but I
know more than a few still had some tricks up their sleeves. Outside of Tumblr
and Lexity, Astrid and Summly were poised to continue to innovate since the
founders/team have products that continue to surprise.

At the end of the day, some of the startups are by founders who are pretty
early in their careers (e.g. Summly) and would like to have a win under their
belt. Yahoo's shopping spree seems to validate a lot of successful products
not just in terms of popularity but also talent and product innovation.

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johnrob
60-70 Million for talent? Wow. I suppose Yahoo is trying a novel approach to
recruiting: target startup founders/employees, give generous equity offers
(via acquisition price) as well as a 'win' on the resume (successful exit). I
have to say, it's a pretty compelling offer...

~~~
hkmurakami
Not sure what level of talent is left at Rockmelt other than their founders.
It hadn't been doing well for a long time so I imagine the cream of the crop
had already left. (I know one such person who had already left for Google)

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ForrestN
Does anyone have any real insight into the strategy behind all of these
acquisitions? Apart from blasé speculation about acqui-hiring (for what
products?) and supposition that Yahoo executives are merely stupid, I'd be
interested to understand the broader pattern. It's a real news story, and
something is going on.

There is a strategy. What is it?

~~~
jusben1369
Yahoo needs talent to succeed. Yahoo, in general, cannot compete with Google,
Facebook or smaller startups for talent. They're better off now than they were
prior to Marissa but they're still a definite second best. So they are buying
talent to stock the shelves with first rate devs and leaders - mostly in
mobile. At some point - say in 6 - 18 more months - talent may come to work
for them to work with some of these smart people they're acquiring reducing
their need to acquire companies at such a frantic pace. It's a smart strategy.

~~~
_greim_
Bear with me while I ask a dumb question. Why pay $70M to acquire a startup
just for their engineering and technical talent? What's the going rate for a
really good engineer nowadays, $150K? Why not just offer $180K? That
difference adds up to a lot less than $70M.

~~~
nostrademons
When you acqhire a startup, you're not just buying the engineers they hired.
You're filtering out all the engineers they _didn 't_ hire.

It takes an enormous amount of work to find that good engineer in the pool of
unemployed workers. This is why big companies pay for sourcers, recruiters,
referrals, interviewers, etc. In a typical company, that 1 good hire resulted
from looking through hundreds of resumes that didn't cut it for one reason or
another.

When a company does an acqhisition, they short circuit all that work, and get
a pool of vetted, battle-hardened engineers who are known to work well
together. That's worth a lot more than just the engineers' salaries, because
there was a lot more than just their salary that went into convincing them to
work for the startup.

If they just offered $180K, a number of the employees would turn it down,
because they go to work for the intangibles like having good coworkers or
working on interesting products, and the only way that Yahoo can bring them on
board are to keep those intangible perks intact until they find a way to
assimilate them into the mothership.

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darkarmani
So why not offer $200K and require proof of currently working at X?

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nostrademons
There are two parts to getting good employees: finding them _and getting them
to work for you_. Many startup employees, by themselves, will not work for
Yahoo for $200K/year. Many startup employees will work for Yahoo for
$150K/year if all their favorite coworkers are working for Yahoo and they get
to work on a product they're familiar with. The only way to bring them over is
to bring them over as a block.

Many people in the startup world don't understand this, but the vast majority
of people in the labor force are not primarily motivated by money. You need to
pay them enough to feel like they're not being taken advantage of, but beyond
that, they go for work environment, interesting coworkers, challenging
projects, and other intangibles. To have any chance at all of hiring them, you
need to provide those and not just money.

(Google understands this very well - they explicitly state with their offer
that most people who work for Google do not do so for financial gain. They do
it because they want to be a part of something great, and have really
intelligent coworkers, and be given a flexible and creative work environment.
Yahoo has a big challenge matching this, given their current lackluster stable
of products, and Marissa's trying to jump-start the virtuous cycle and bring
in folks that people would want to work with.)

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stevenwei
_Many startup employees will work for Yahoo for $150K /year if all their
favorite coworkers are working for Yahoo and they get to work on a product
they're familiar with._

That seems at odds with the fact that most of these companies products are
immediately shut down when the acquisition is announced.

~~~
nostrademons
Shutting down the product is often not part of the deal. Many founders will
deliberately choose an acquirer that offers less money but promises to keep
the product alive.

It's often a bait-and-switch tactic on the part of the acquirer. Once the deal
is complete, the acquirer owns everything, product and all, and has no legal
obligation to keep it open and active. If you wait a month or two after the
deal closes to announce this, then many of the employees already have large
sunk costs in the employer - they've possibly relocated, they've signed up for
health insurance again, they don't want to have a tenure of 1-2 months on
their resume, they've learned some of the acquirer's systems, they've made
contacts in their new employer - and so you can keep them even if it's not a
choice they would've made initially.

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normloman
Why does yahoo keep buying companies simply to acquire talent? Isn't it just
easier to just post a job ad? I don't think there's a shortage of talented
programmers working in social media.

Someone please explain.

~~~
hga
According to the article that this comment of mine discusses:
[https://news.ycombinator.com/item?id=6141238](https://news.ycombinator.com/item?id=6141238)
that's the only way they've found to acquire mobile talent after treating it
very badly in times past. Sounds like no matter how energetic the recruiting,
people in this field aren't going to jump to them unless they have little or
no choice.

Key sentence fragment: " _In each instance, Yahoo has locked up engineers with
two- to four-year contracts...._ "

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jack-r-abbit
But you always have a choice. Nobody can force you to be acquired... that
would be slavery. The seller can require as part of the deal the buyer offer
to keep a certain amount of people at a certain pay. Buyer can accept that
deal or negotiate. But at the end of the day, every employee has a choice to
sign the new contract or not. So anyone who got "locked up" in a 2-4 year
contract did so because they felt it was a good move for them (or at least
better than not having a job).

~~~
hga
Indeed. But I'm pretty sure they got a "sign this soon or leave" offer than
many chose not to refuse.

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mikeash
Even then, they can leave Yahoo at any time if they change their minds.
They'll just lose out on their big payday.

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hga
Outside of California they might be ... hindered by non-competes. I was once
in this position:
[https://news.ycombinator.com/item?id=6148918](https://news.ycombinator.com/item?id=6148918)
and one of the many reasons I didn't accept the offer was that non-competes
were enforceable in my state, the contact had a nasty one, and the acquiring
company did business with so many of the area's organizations that I would
have been seriously disadvantaged when it came time to separate.

~~~
mikeash
Yuck. Fortunately, both companies in this case are in California.

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parsabg
That's the most expensive set of Chromium extensions.

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eldavido
I think a lot of this is a side-effect of it being socially unacceptable to
have 10x (or more) pay differences between good and bad employees at tech
companies. That sort of thing is tolerated on Wall Street, but not SV.

Prediction: SV business leaders will find a way to meaningfully tie pay to
performance more than they currently can, and offer the best 3-5x what the
average earn.

The current system is just too roundabout.

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badclient
If Marissa gave $70M to HN for acquisitions for Yahoo, who all would you guys
acquire and why?

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DannoHung
If I had any clue what their strategy actually was, I could give you a
coherent answer.

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nilved
Isn't it an immense amount of negative PR to buy an app and shut it down? Why
does this keep happening?

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unknownian
You think people actually cared about Rockmelt, the "social web browser"?

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nilved
I don't use Rockmelt, but I did use Flickr and delicious. Yahoo is the touch
of death for web applications and I've grown to resent their tendency to buy
and ruin services I use. This case with Rockmelt is more of the same: I don't
use it myself, but the people who do are now less likely to like Yahoo.

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Pxtl
I've heard they finally gave Flickr some TLC and Meyer is looking to revive
it... Too bad I already migrated away a long time ago.

~~~
weisser
What did you migrate to?

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smegel
Yahoo better be planning something big after all these purchases.

