Since taking over Yahoo back in July 2012, Marissa Mayer has been on a mission to transform the company into a modern web power player. Yahoo, with its massive and diverse array of content, is a portal for millions of people on the web. Whether you're interested in checking out share prices, reading up on your favorite NBA team, or entering a fantasy football league, you can do it, and much more, through Yahoo.
With that said, Yahoo continues to get crushed in search and email and is seen as something of a dinosaur in the age of Web 2.0. Ms. Mayer's job is to make Yahoo cutting-edge again. As the youngest female Fortune 500 CEO and the 20th employee of Google, it would seem as though she's an excellent pick for the job.
This week, Marissa Mayer made a striking and attention-getting move to help expedite Yahoo's trip towards the cutting-edge. The company acquired Summly, a two year old startup whose founder is only 17 years old...
Before I even get into what Summly does, let's talk about the price Yahoo paid to get it.
$30 million. And, apparently, 90% of the acquisition price was in cold, hard, cash.
Frankly, knowing that the founder is only 17 years old, combined with the fact that I'd never personally heard of the company, I had to dig into it a bit to see what it's all about.
So, just what is Summly? In brief, Summly is an iPhone app that provides short summaries of news stories for reading on the go. Have an iPhone? Have a short attention span? Crave news in large, but easily palatable, doses? Summly might be something you'd enjoy. What's really powerful about the app is that it automatically and intelligently summarizes news stories.
The app, which is free, has apparently been downloaded around a million times and has had over "90 million summaries read to date." Upon the announcement of the acquisition, the 17 year old founder posted that the app would be removed from the Apple app store, but that its "summarization technology" would soon be rolled-out for multiple Yahoo products. Sounds like Ms. Mayer made a solid decision in scooping up Summly then, right?
Perhaps not. Mashable reports that Summly didn't develop or own its summarization technology. Rather, it licensed it from the nonprofit Stanford Research Institute, the same organization that spun off Siri to Apple. Per Mashable, "SRI's natural language processing engine is the entirety of what's driving Summly." Summly, it would seem, simply layered a pretty interface on top and did some good marketing to get people to download the app. Though, it isn't altogether difficult to get someone to download a useful app if the thing is free. Reports also indicate that the company had no revenue to date.
So, this all begs the question...why did Yahoo buy an iPhone app with no revenue and no proprietary technology? It might seem absurd, but it very well may have made the acquisition to make a major PR splash.
Want to make Web 2.0 waves? What better way than to buy a teenager's company. It's a feel-good story that gets a lot of press. And even if Summly doesn't own the summarization technology, Yahoo will still be able to effectively introduce it to its many millions of readers. Even if Yahoo is viewed as an internet dinosaur, it's still a portal that millions use as a means to explore the web.
It's certainly a curious move and I'm interested to see how things play out. At the very least, it's been better received than the backlash that Ms. Mayer received when she announced the death of telecommuting at Yahoo.
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What do you guys think? Anyone on here use Summly? Any thoughts on Yahoo's performance to date under Marissa Mayer? Leave your thoughts in the comments.
Waste of money. Literally tons of apps for both android and iOS that do this exact same thing. Some generate revenue, others don't. No reason for this thing to be purchased for 30mil, but then again, we live in a world that placed an absurd value on Facebook.
Another swing and a miss by a dying company being run into the ground by a confused CEO.
Here's a related article: http://gizmodo.com/5830076/how-i-made-a-15+year+old-app-developer-cry
[quote=bengigi]Here's a related article: http://gizmodo.com/5830076/how-i-made-a-15+year+old-app-developer-cry[/…]
Wow that was brutal.
[quote=bengigi]Here's a related article: http://gizmodo.com/5830076/how-i-made-a-15+year+old-app-developer-cry[/…] So weird, how the guy talks about rape... :/
His dad's a banker, his mom's a lawyer. Obviously they did a lot of the work for him.
Still - it's awesome to see a 17 year old do this well.
It's awesome to see a privileged 17 year old strike it rich with an unoriginal idea that already saturates the app world?
I hate people like you.
Is it his fault that he was born into privilege?
Can't you see the couchy perhaps meant that it is awesome that kid with resources finally did something other than blow their allowance on blow?
Pulse was bought for what $100 million by Linkedin a news app just like this.
Yahoo never ceases to make bad decisions
wow.... did not know about the SRI stuff.
Now I kind of want to try summly... How does it decide what is "important"? Can you create your own settings? Google... I know.
Anyone want to guess at which dinosaur search engine his mother is a lawyer at? :D
Marissa Meyer, oh if this is what I think it is, I'm gonna wet myself...
Certainly a viable way to skip the 2 years as an analyst!
Nice job bashing him all...really kudos.
Well, first of all, it's not a big deal per se. It's just an acqui-hire (or maybe a tech + partial acqui-hire?). They are shutting down the app. By definition, that means it's just an acqui-hire. So not a big deal in isolation. Who cares about another acqui-hire? Yawn, and immaterial.
However, I don't know if it's intentional, but it is brilliant PR. It all makes it sound like, for the younger set, Yahoo! can be cool. Us older folks, who remember the greatness of Yahoo! 1.0 and its slow decent to a death spiral under Semel et. al. have given up on Yahoo! But perhaps it doesn't have to be that way. This story, the 15 year old starting the company and proudly selling to Yahoo! at 17 -- it's just inspirational. They're pandering to the next generation of young bright engineers, they want them to see Yahoo can be "cool".
Marissa Meyer could just tweak Yahoo! operationally, which is what Tim Armstrong seems to have done with AOL. That has yielded a really nice growth in AOL stock price, but ultimately, it's still an unrespected property today. I bet it's depressing to work there. Buying TechCrunch was an interesting play but ultimately it became anti-inspirational
But it seems like Marissa Meyer is going further. She's working hard to be truly inspirational. If you do inspire the troops, if you can find a way to do it for real, not for pretend -- then they can do Amazing Things. There is incredible talent at every BigCo. You just have to open it up and let it flourish. You have to inspire it.
Also this deal is right in Marissa's wheelhouse. She already bought Stamped and a few other mobile companies for "pennies on the dollar". Shes looking to acquire great mobile talent to build apps in house for Yahoo. If she's going to pay a couple million per head, thats fine for good talent. It may shock you, but there are very high paid people outside of the finance world. Marissa is attempting to make Yahoo into a product company. The sad truth is they dont have a cash cow like Google. Where as google can focus on all these other projects (Gmail, self driving cars, youtube...) all as long as they free people up to search more, or provide a farther reach for their ad network. Yahoo doesnt yet 100% have that.
So I think this was just an acqui-hire. But putting an inspirational spin on it is just brilliant, even if they made it up on the fly
Issue is it clearly wasn't an acqui-hire, or else Marissa is paying a ridiculous price for average talent. Only two of their employees will join Yahoo, plus the kid, who will be part-time and there is no one raving about his programming ability, just his general likability. For that matter, no one is raving about any of their abilities - their code is outsourced to SRI (http://summly.com/technology.html). Also, Marissa is not being inspirational, lots of Yahoo employees are furious with her for ending telecommuting and being an academic snob about hiring.
Also, Yahoo does have a cash cow, it's search and display advertising (http://files.shareholder.com/downloads/YHOO/2391541202x0x574542/2ae1a20…, p40). In fact, revenue from other sources has been falling. They still have a ridiculously high number of impressions, it's tons of people's homepage and yahoo.com is still #4 in the US (http://www.alexa.com/search?q=yahoo.com&r=home_home&p=bigtop). Plus the deal with bing.
Finally, Yahoo can't be cool. That is the argument Ron Johnson tried to use at JCPenney, and he's already had to admit mea culpa. Marissa is wasting shareholders cash if she thinks $30m is the going rate for a front-page ad in the NYT, or that that is what it takes to be cool.
Final disclaimer, I'm not a TMT banker, but this is just common sense dude.
I've actually been giving this a lot of thought since it was announced and I keep coming back to the same thing: if I were handed a check for $30 million at 17, I might have had a shot at becoming a decent human being.
I was a sweet kid at 17 before life dug its hooks into me. The vast majority of the evil I've committed in my life has been in the pursuit of money. I hated being poor so much that I was willing to do anything to be rich. If I had to utterly destroy someone's life just to put a few inches of distance between myself and poverty, I didn't bat an eye. I got to a pretty comfortable place in life, but my God did I leave a shit ton of carnage in my wake.
Just can't help but wonder what I might have accomplished if there was no need for all that bad shit.
I'm optimistic for this kid. Maybe he'll end up being someone to look up to.
I know the kid
marketing trick...
But is he going to a target when he graduates?
Im pretty sure Yahoo could have paid this kid a $1 million and he would have accepted it. Yahoo seems so wasteful.
Props to this kid. Good for him and boo to all of you haters.
I think 30m was a little much but I actually believe in Yahoo and think Meyer is doing the right thing. The company was going down the tubes and she can only try to revive it. However I think this is not the right direction to be aiming though for acquisitions. They need to be acquiring startups that will make money quicker. And a 17 year old wont add much value anyways. This had to be a publicity stunt
Seems like more of a marketing move than anything else. Nice to see that Yahoo's still alive!
i would overdose within a week if i got that much cash as a kid and i've never done drugs or even smoked before
Good for the kid. Jokes on all the idiots in this thread hating.
This is awesome. I use Summly everyday... download the stories and quickly flip through them on the subway. I don't even know of any competitors (not that I have searched for them).
Congrats to this kid. Some skill and a lot of luck paid off. Everyone should try to expose themselves to as many right-tail opportunities as possible.
It's actually really shitty for you in that case, because Yahoo is going to shut down Summly.
Heard his dad is an analyst at MS (couchy touched on this in the 4th post), I believe in ER or something. Always nice to see a kid one up his old man.
Waste of money or not, anyone else feel that much less accomplished? Wish I had $30 Mil at 17
It's amazing how much hate there is towards a kid who actually CREATES something. When a bunch of bankers, who just make money off of the innovation of others, complain about stuff like this, it is quite ironic.
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