I would be interested to see the Summly summarization of this article! I think it would read something like this:
Yahoo bought Summly, a startup with an app that not many people used, made no money, and employed no technical geniuses (since it wasn't actually built by them), because Marissa Mayer believes summarization technology is "going to be huge for Yahoo".
You know, I think I prefer to live in a world where giant tech companies occasionally act in strange, irrational ways that result in random people getting multi-million dollar windfalls.
Especially if said people vaguely resemble, well, me. That being, entrepreneurial software folk running companies with trivially buildable products. That's the sort of person in my mind that should have as many foolish megacorporations as possible stumbling over one another to randomly dump tens of millions of dollars in cash upon them.
Given the alternative world, where all companies behave rationally at all times and nobody ever makes mistakes that could possibly make, say, me a gozillionaire overnight, I think I'll keep living in this world.
Keep up the good work, Yahoo!
[Disclaimer: I own a small pile Yahoo stock (that made me a bunch of money in the 90's and has been taking it steadily back ever since), so I probably lost a few hundred dollars because of this particular deal. I'm happy to pay it, much as people who buy lottery tickets are happy to pay it. Having a crazy, aquisition-happy company out there doing its thing is more than worth the price]
>You know, I think I prefer to live in a world where giant tech companies occasionally act in strange, irrational ways that result in random people getting multi-million dollar windfalls.
You're in luck, that happens all the time with executive compensation packages.
Maybe this was edited in later (I missed it the first time), but...
>Though Summly's own Web site once said: "SRI International, with the help of the Summly team, built the summarization technology behind Summly," we are told that D'Aloisio "invented" the product's original technology.
>In a statement provided to us by a Yahoo spokesperson, an SRI spokesperson says: "Basically, Nick developed the original code for Summly."
>"After the original product was built, SRI supported development of the technology and provided artificial intelligence expertise in machine learning and natural language processing."
I don't know about you, but I need a pretty large grain of salt. http://www.youtube.com/watch?v=Y11ps1H6Aq4 is a youtube demo of his first app, trimit, 9 months and $300,000 in VC before summly. It seems 2 comprez ur mezages like this. Maybe that's the original code.
At the 1 minute mark he says "some other.. form.. of documentation.. which I don't know what that is". So either he misspoke, or he didn't actually even develop that original app.
I used automatic summarization to try to reduce the article to a pithy tweet and ended up with:
"Fuck, I don't know. And what's with Bezos investing in BusinessInsider? And what is Amazon's business plan anyway? And why does Apple's stock keep dropping whenever it gains market share?"
And what's with Bezos investing in BusinessInsider?
For peanuts they more or less buy good coverage in a widely read news site. A certain VC fund also invested in them and PandoDaily. It's a great investment, even if Business Insider goes kaput 2 years from now.
I guess it has something to do with IP. The way I understood it was that the company Summly licenced the summarisation algorithm was selling it to Yahoo!, but they couldn't do that because Summly was using it, too. So, to get them out of the way, Yahoo! bought them and shut them down.
Disclaimer: This is just the way I understood it, I might be partially or completely wrong.
That doesn't make much sense - as far as I understand, so far as the US, you cannot patent or hold a license over an algorithm, only an implementation thereof.
Yes, but if the algorithm is a trade secret and you're licensing it out with terms of use that aren't favorable to you, you may determine that its in your best interest to buy the company rather than get sued for breach of the licensing contract depending on how much cash you're anticipating to lose through that litigation.
My thoughts exactly. The 17MM was a 'cheap' way to save face for big-name investors and "celebrities" who'd been duped. Circle-jerk money.
"Angel Investors and Advisors include; Ashton Kutcher, Betaworks, Brian Chesky, Hosain Rahman, Jessica Powell, Joanna Shields, Josh Kushner, Mark Pincus, Matt Mullenweg, Seb Bishop, Shakil Khan, Spencer Hyman, Stephen Fry, Troy Carter, Vivi Nevo, Yoko Ono and many more. We are also working closely with News Corporation on the summarization of their content."
Edit: actually, reading all of the comments on this page, I think my explanation is less likely than the "summly may have had a special license, and SRI couldn't be sold unless summly was acquired as well" (without resulting in lawsuits or sub-licensing deals) and/or "a nice way to pay more for SRI via the backdoor" (artificially increasing the value of the summly stock they held -> more $$ for SRI).
Do we know how much stock SRI owned of the company? Perhaps they provided services in exchange for summly shares? Wouldn't be the first time.
If the real story is that Yahoo bought the technology to summarize articles from SRI International, who partly owned Summly -> why did Summly's owners make 30 million?
The article isn't clear but could it be that Summly has a licensing deal with SRI for their "summarisation technology" and Yahoo wants to take full ownership of that "summarisation technology" and the licensing deal Summly has means that's not possible for Yahoo to do? For example Summly could have the only (maybe exclusive?) 5 year license on whatever... so Summly is acquired by Yahoo and now Yahoo has the only license and full ownership?
Would Yahoo acquiring the licensed SRI technology allow them to void any existing licenses?
Exactly. I came here looking to see if anyone else had a good idea of what theory this article was trying to express.
I think the author is trying to infer that Yahoo agreed to buy Summly, so that SRI could liquidate their equity in Summly. Maybe, SRI saw Summly as a loser and as part of their negotiations with Yahoo, they asked Yahoo to turn this loss position into a win. So, maybe, then that $30M price was really $20M as part of the SRI deal and then $10M for assets and aqui-hire talent of Summly itself.
Acquiring Summly seems to have been an almost incidental side effect of a deal Yahoo made with SRI for a piece of "summarization technology."
A source tells us that Yahoo has "agreements in place" with SRI for "knowledge transfer," and the acquisition of IP, code, and technology.
Until Yahoo bought it, SRI International held equity in Summly.
Maybe that would be too overt. Maybe they needed to get a way to get a license with SRI that didn't look like a me too act and also nullify existing licenses.
If SRI actually had equity in Summly, then this is a way to pay off SRI, grab the license for Summly and potentially get SRI to make a change to its licensing agreement with other companies in Yahoo's best interest.
However, I thought that Apple wholly owned SRI, which would make my speculation BS...
Are there sources for the $30 million? I've only seen it mentioned in secondary sources, never in an official Yahoo press release (or similar). I suspect that was leaked, and the real price was much lower.
Everyone around the world was saying 'Yahoo' a fortnight ago for the first time in a long time because of this purchase of summly and coincidentally, Yahoo also quietly became the default search in Safari for iPhones during March. I like to think this is all great marketing and survival positioning by Yahoo as the big 3 companies/partnerships (read on) rear up for an exciting next few years in technology.
Why would Apple change the default search? Well Apple and Google are the main rivals in the mobile market, it makes sense for both Apple to choose an alternative default search engine, as they don't want to strengthen their main rival. I also think Apple's recent 'interest' in robotics (Siri, hiring ex-segway engineer) v.s. Google's robotic cars & Glass, this will be another front that Apple will have to fight Google on.
That leaves them with two options, the first being Bing. No way in hell would they choose Microsoft to partner with, with MS' purchase of Skype and close ties with FB you can expect MS to push harder than ever in the Mobile space, over the next few years (assuming they can tie all of their products together neatly).
So that really only leaves Yahoo for search, which works out well for both companies; Yahoo get to survive the battle of the big 3 and still appear somewhat relevant and Apple are no longer strengthening their main rival. I really have no idea what I'm talking about but it sounds interesting.
tl;dr - purchase of summly was marketing and survival by Yahoo
The next logical step for Yahoo! is to move into the enterprise. I know a great startup you could acquire that would accelerate your move into that space. I expect it could be had for somewhere around what you paid for Summly. Call me.
Reading between the lines, I'm guessing Yahoo really liked the SRI tech (perhaps also with some of the additions made by Summly). They wanted to exclusively lock it up.
If Yahoo had gone just to SRI, a competitor could have bought Summly... and Summly may have had, as part of SRI's stake, a perpetual and transferable license that Yahoo didn't want falling into any other acquirer's hands.
I think Summly was really started by SRI or at least co-founded by them and then the exec team was brought on to run it. They created the tech, put Nick as the CEO/face of the company as he had previously built/outsourced Trimit & tried to build a consumer startup on it.
There seems to be very little distinction between SRI and Summly.
I think Trimmit originally received investment from a hong Kong vc. Then seeked out sri to improve the product at which point they got deeply involved.
Also, if it is true that a) Summly got a better deal than Yahoo! could've; and b) that those terms were transferrable in the case of a change of ownership ... well, some poor dumb bastard at SRI legal is probably having a very bad month.
Tech news from the USAToday news section and TechCrunch to Anandtech and, yes, Hacker News was dominated by news of the Summly acquisition for five days.
The PR read that Yahoo is acquiring a company but shutting down its product and getting only 2 of their engineers for 30 million dollars. PR like that gets Yahoo's name in the press but does nothing to improve the image that Yahoo has no idea what it's doing.
"does nothing to improve the image that Yahoo has no idea what it's doing."
I think that's true, but only true to those people who read (or remembered or understood) beyond "Yahoo buys hot new company, hot new technology, hot new talent". The PR implication is that Yahoo is investing in once again being hot and new.
For those of us who understand the details of the company and product being bought, Yahoo's reputation was already entrenched. For the majority of readers, however, "hot new Yahoo" was the takeaway[1].
[1] Based on my experience as a journalist / writer, and the half dozen people who raised Summly in conversation with me the week the acquisition went public.
But startup acquisition news doesn't reach the vast, VAST majority of Yahoo's current, prospective, or desired users. Even pretending news like this reached a broad audience (while also pretending that audience doesn't have the same context you're attributing to HackerNews readers), acquisitions aren't just expensive - they're expensive with a significant risk of creating longterm internal pain of varying types and degrees for what, at best, could be a shortterm positive blip in general opinion.
How does this perceived misuse of funds and focus impact Yahoo employees? Their moral, productivity, and general satisfaction/enthusiasm?
I don't know, who are Yahoo's prospective customers? Search advertisers, right? They need goodwill with small business owners, whether those businesspersons are technically inclined or not. I'm sure they reached many of that type with this announcement. What niche do you think Yahoo needs for a customer base but has totally failed to contact?
No disagreement from me there! I don't think this was a good way to spend $30M (assuming I know the details behind it, which we all probably don't). But in response to PR qua PR, I think there were benefits.
Possibly because the local media here found an Australian angle, this was above the fold news (today's version of front page!) across a number of mainstream news networks where I am. So it reached a lot of the desired users.
Again - I don't think this was a good way to do it, of course!
> "Yahoo buys hot new company, hot new technology, hot new talent"
IMHO, any non-tech person who read that bit of news will likely have never heard of Summly, and will only remember the age bit. Which kind of makes it all read as "Yahoo needs help from teenagers" and conjures images of kids roaming around the company.
From my anecdotal observation and discussion with people who aren't so obsessed with these details, the story has been pretty misinterpreted by the masses though. Everyone was telling me how cool it was that some kid sold up his business for so much money.
I was talking to my friend and I kept on having to stop him every time he went down the "some 17 year kid created..." No one else he chatted with about it was clearing the smoke from the mirrors. Small sample, I know. I just don't buy that this was a Yahoo! story so much as a story about some 17 year old who build "some news summary app."
I saw it covered on CNN and other network news. They were comparing the acquisition to something like Youtube or the starting of facebook. I think it definitely plays to the heart strings of the american dream. "17 year old kid hits it big all thanks to the generous folks at Yahoo and his hard work"
Yeah, but in all honesty, superbowl ads are pretty "local" to the north American continent, maybe southern, too. A lot of people in Croatia don't even know what superbowl is, those who do just know about it.
Also, I regret to say that, when I overhead a conversation, someone said their browser was Bing and that it was the "bestest" ever. That person is in the same class as me. I study CS.
To the degree Summly's license to the technology was transferable, the purchase makes a lot of sense because it prevents strategic acquisition of Summly by a potential Yahoo competitor.
Even if not transferable, the purchase prevents Summly from partnering with a Yahoo competitor, and that is very likely to have been allowed by Summly's license.
With nearly $4 billion in net income last year, the purported purchase price is less than a penny to the dollar.
It's great to get some insight on a deal that, frankly, I couldn't understand.
I am of course biased, because I believe (like many others) that algorithms are bad at summarization, except for already well-structured content (news are usually like this). That includes most blogposts and videos. My startup (tldr.io) is trying to actually solve the summarization problem using crowdsourcing. For example, here is the summary of this article: https://tldr.io/tldrs/516542c52dcbc1ab3b0000d2/heres-the-rea...
I actually stopped reading Gizmodo because i thought the article where they made him cry a few years back was too far. Shaming a 15 year old kid publicly no matter how annoying seemed too far. Now he successfully gets summly acquired and the support for and shade that has been thrown at this kid has been so massive. I still don't know what to think of the kid, but I do think that SRI's tech definitely meets the needs of Yahoo and would fit perfectly with their media content.
However I think it does expose the difference between media reporting(tech genius,visionary, future leader, hard working) and actual reality(Narcissistic, child like, unprofessional). And those traits have been exposed again, since he claimed to invent the tech and developed the app in the media. Media have hailed shower of praises, mainly because he uses a top PR agency.
Its kind of depressing for me, because it seems to mean being showy, and having a good PR facade is worth far more than people doing the actual work.
> Its kind of depressing for me, because it seems to mean being showy, and having a good PR facade is worth far more than people doing the actual work.
Marketing is a huge part of the startup world. There's a reason people are told to stop building at MVP - what you build isn't really important, and you're really likely to throw away what you built and switch to something else.
Very few people invent anything. Most developers with limited resources work with groundbreaking technologies(built by others) to create something meaningful.
Flagged. This article contains zero new information and just speculation. Unless you were involved in the transaction you have no idea what was involved. Maybe they overpaid and maybe they didn't.
If you believe Yahoo are stupid you're free to go and short Yahoo shares. They are after all a publicly traded company.
Lets stop with all this stupid speculation where people rehash the small amount of public information for the purpose of linkbait.
Further, D'Aloisio deserves credit for outsourcing technology development and app development to the right firms, and coalescing their work into a product that made him millions.
I can't tell if this is a brilliant dog-whistle dig or if it's actually being said without irony.
All of the articles I've read about Summly have a bit at the end where the author bends over backwards to not appear to be crapping on a 17yo. I read that passage the same way.
I'd give him a pass on that. He was not unlike any other smart, impulsive, ambitious teenager with a passion for ideas (namely, his own).
When I was 20, I was highly enthusiastic about a card game (actually a pretty good one; it plays really well and people I've never met write me about it) I created, called Ambition, and got into some flamewars that I shouldn't have.
This is one of the rare cases where I wish I were born 5-10 years later; the web is now mature enough that, instead of flaming Wikipedia to make it a "real game", I would have just put it up as an HTML5 game and people could play it. When I was 20, you still had to know a lot to get a real computer setup outside of the CS lab. I didn't quit using Windows for home stuff until age 24 (2007). Now with 'brew install emacs' as opposed to bullshit '90s-era Windows nonsense, it's a million times easier for someone under-20 to start building instead of just talking.
Convex dishonesty (see here: https://michaelochurch.wordpress.com/2013/03/29/gervais-macl... ) can be very tempting when you're trying to make a good idea "catch". You don't really have a sense of it being wrong until you're older (25+) and have seen what trust-sparsity does to organizations.
If you're under 25, I think you deserve a pass on well-intended convex dishonesty. You just don't have enough experience with social systems to see why it is (usually) wrong.
Basically, Nick was really pushy when he was young. I personally think all of us were, at some point, an immature or annoying teenager so his behaviour is probably not that out of the ordinary for someone his age. Hopefully he is more mature now.
Some of us had to matured early, since we were raised on family farms without the benefit of being mollycoddled. If you need to grow up, I still have family in the business that can assist in positive behavior modification and inter-personal respect training. Might do Nick some good to live/work outside the 1%.
What's ridiculous isn't that Nick (whose father was a banker) had those advantages but that more people don't. It's not Nick's fault that people like us don't get audience with VCs in our teens.
Sure, Nick had early success, lots of ambition, and the typical immature character of a 15-year-old who's enthusiastic about his own ideas. Impulsive, creative, teenagers tend toward pushiness. Ask Wikipedia about my Ambition (sorry, had to make the pun) and you'll hear a similar story. We all have episodes of stupidity in our past.
It would be interesting to see what mountains Nick could climb if he wasn't helicoptered to the summit.
As for maturity, I probably grew up in totally different time, culture and environment than most of the HN readers. Even my siblings children don't understand their parents background. At 15 we were expected to be top students, hold a job, play sports/music and be respectful to a fault. (Yes sir.) No one would ever want to be consider a punk or a brat.
It's sad, but in the winner-take-all era that has come about after the Reagan Era, self-promotion (even using extremely unfair advantages, such as a parent who knows VCs) wins out over restraint and even over decency. This has nothing to do with Nick; it's just the way times are changing.
I have no idea whether this is good or bad. It just seems to be how things are playing out. This is going to sound awfully cliche, but hate the game and not the player.
This may be wishful thinking, but we may be reaching a Singularity of Stupid, and perhaps there will be a Flight to Substance after the cool kids and VC darlings and celebrity investors get burned and their heads shrink a bit. I'd like to see the Flight to Substance and return to Real Technology soon. Curing cancer is a lot more important than another damn social media app.
Social media is the reality TV of startups. It's not common because it's good but because it's cheap, with "cheap" here defined in the truly scarce quantity: technical talent. Any idiot can do SM, which is why there's so much of it.
I don't think it's ironic. I also don't think managing and coordinating multiple outsourced developers is at all trivial. (Though, true, it's probably not worth millions either.)
Yes, but somo isn't some cheap outsourcing company. They will completely design your app, and then develop it for you. Its isn't a company where you manage a group of contracted coders.
I think my point, in a roundabout way, is that for many/most startups the actual writing of lines of code is not the hard part. At least, that's what I've found to be the case. If you can successfully outsource that task, more power to you.
Kevin Rose paid someone a fixed amount to write Digg, and then paid other people salaries to continue writing it. Writing code is not the most important part of most businesses, excluding the few which are built on an emerging technology.
Facebook, Amazon, HackerNews, Reddit, Wikipedia, Twitter, none of these would be hard services to get to 1.0 for any halfway decent programmer. But somebody had to know what to build, they had to believe in it, and they had to work for it, to learn from their mistaks and flush out the vision. And most of these people probably paid somebody else to write most of the code.
And they had to get a sizable amount of other people to truly care about the thing enough to spend lots of their spare time dicking around on it. Reddit, Amazon, Facebook, HN, Wikipedia, and Twitter depend on unimaginable amounts of hours spent by volunteers all over the world who get $0 for contributing the actual content and camraderie, which really is almost the entire value (except the case of Amazon, where it's only a pretty big part).
Are you referring to reviews on Amazon? Are those really that big of a part of their business? I rarely read them, personally. I just assume they are gamed.
The whole recommendations engine is based on user participation. Amazon naturally collects tons of data about their users, and they probably wouldn't be happy to lose this data. If you were the only user of Amazon, it wouldn't work nearly as well. I would think that features like "other users also bought," the thing that pairs up books into relevant groups, "Listomania," and so on, were crucial to Amazon's success.
And yeah, I do think the reviews are quite important to Amazon. A book with 4.5 stars and some intelligent good reviews must be good business for Amazon, don't you think? Even if some people are skeptical of reviews, they are probably much better than most other types of advertising.
Coming from Wall St. it would be pretty absurd if it were irony. There's an entire world where billions are made from deal making and leveraging other people's work.
I don't understand why this shouldn't be said without irony. If SRI says he built some part of the original app, perhaps without their engine to power it and really make it awesome, doesn't he deserve some credit? I think he does. Plus Summly DID have a lot of users, just not acquisition level users.
Yahoo bought Summly, a startup with an app that not many people used, made no money, and employed no technical geniuses (since it wasn't actually built by them), because Marissa Mayer believes summarization technology is "going to be huge for Yahoo".