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?
I guess when the son of a wealthy financier gets investment from tons of big name angels for a startup based on a licensing agreement (try getting that one funded yourselves folks) and then 18months later it gets sold for an amount that makes lots of money for all parties but the value doesn't seem to be there for the acquirer - a company with all kinds of other issues... I dunno that stimulates my BS detector and makes me at least interested in reading a more detailed account of what went on. Hopefully to read a tale of heroic entrepreneurship worthy of emulating, if not to figure out what web of interests lay behind this odd deal.
Could it be that this is a move to get Yahoo more attention?
30 million is not that expensive for advertising, and pretty much every local news show covered the story of the amazing 17 year old start up founder who was acquired by Yahoo.
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.
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...
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.
The app doesn't have a million users, it had a million downloads. Downloads != users, especially with media push heightening curiosity. I'd guess actual users was less than a 1000 a day.
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!" ;)
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?
It is for that very reason that everyone on HN is so fixated on it: any competent person can see that something is amis here, and the outrage on HN is a reaction to the reductionism and hyperbole of the media, which eats this shit up. Of all places, HN is probably the most likely to call BS on this sale.
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.
I was a VP at Morgan Stanley - it is simply a title that is bestowed on all more-or-less competent front-office employees who've been with the firm for about 5-6 years. Ie - there are thousands of them.
Investment Banking hierarchy:
Analyst - college graduate - 2 year program)
Associate - MBA graduate or promoted Analyst - lasts 2-3 years
VP - promoted associate (minium 5 year experience in the industry)
Director - promoted from VP (after a few years)
Managing Director - promoted from Director. These are the real rain-makers who earn a lot. Still - the firm promotes roughly 200-250 directors per year. Total number of MDs is probably a few thousand.
So - saying that someone is a VP really means nothing.
You didn't explain anything besides "his father is a VP at Morgan Stanley." The rest is just hyperbole and sensationalism. Explain how VP of Morgan Stanley => Yahoo buying startup for $30M. There are hundreds of VPs at Morgan Stanley.
If you had said he was a MD at Morgan I would have raised an eyebrow, as is, VPs are a dime a dozen. Furthermore, it seems as though his father is on one of Morgan's commodity desks. If he is in fact a trader, this means he has no influence on the I banking side (where deals are done.)
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.
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.
"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!
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.
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?
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.
«How is github any different than Summly from a 'renting' of technology perspective?»
Are you kidding? Github has global visibility, and is the absolute leader in the open source software hosting vertical.
From a "renting" of technology perspective, they are not that different. From a "large customer base" perspective, which was also mentioned in the article, they are complete opposites.
"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."
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."
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?