16 ms·

What's Actually Wrong with Yahoo's Purchase of Summly

• parennoob 14y ago
  If this article's premise is correct, Yahoo is buying Summly in order to generate more news about Yahoo rather than the intrinsic value of Summly. However, this article is adding to the flood of news about Yahoo acquiring Summly, thereby giving the purchase even more publicity. I wonder how many articles have taken the same approach.
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• lecha 14y ago
  Insightful piece. Thank you. One point I wish the author would elaborate on is the value a company gets by acquihiring a great designer. I haven't used Summly so I cannot measure the talent of a designer Yahoo gets. But it would be wrong to ignore the design by focusing on technology advancement in "glue vs thought" argument. How much would a company pay to acquihiring Jonathan Ive or Philippe Stark? The author may be right to question the designer's talent or by googling "I use Summly", but it seems rather shallow analysis.
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• brown9-2 14y ago
  Totally unrelated, but what does I interviewed at DE Shaw when Bezos was there and turned them down for 1/10th of their salary offer mean? I'm having trouble parsing the "for 1/10th of their salary offer" part.
  • talmand 14y ago
    I took that to mean he opted for a different job at lower pay for whatever reasons he had at the time.
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• michaelpinto 14y ago
  Yahoo didn't buy the technology, they purchased the talent. Talent that knows how to reach an audience. You can always get high quality engineers to figure out the rest...
  • omellet 14y ago
    The article's main point is that the founders didn't do anything really noteworthy, technologically speaking, and so Yahoo overpaid for the talent in question.
    • snaky 14y ago
      >the founders didn't do anything really noteworthy 1M+ downloads for an app with licensed technology is noteworthy.
      • 31reasons 14y ago
        1M downloads with 1M+ dollars in investment is not noteworthy. You can basically pay for that much downloads. Not to mention its a FREE app!
      • nilkn 14y ago
        They got that through marketing, not technology. Have you seen the launch video for Summly?
      • flyosity 14y ago
        A million downloads of a free app is not really that noteworthy. My friend made a simple, free iPhone game in a weekend where you tap on a soccer ball and keep it from dropping and routinely gets 10s of thousands of downloads a month with absolutely no marketing.
        • badgar 14y ago
          Your friend is a genius and might be the next pg.
  • 14y ago
• ChuckMcM 14y ago
  I think the author makes this comment: "Summly's entire business model seems to revolve around catering to this demographic. Frankly, it pains me." I reads like a critique of Chubby Checker's "Twist" from a professor a Julliard. Perhaps, and I say that because I can't know what they were really thinking, but perhaps that was the point. This company had successfully "catered to this demographic" (which was defined as young hipster like brogrammers) and while those guys drink their PBR and deck out their mancaves perhaps it is a demographic that Yahoo desperately wants to reach? Maybe the whole point was that Yahoo folks were building things for middle-aged dot boomers and not for the cool kids. Maybe the goal was to get more people who could quickly assemble a MVP from existing APIs that appealed to the emerging cohort of buyers and trendsetters. Maybe NLP wasn't the point.
  • dmix 14y ago
    > people who could quickly assemble a MVP from existing APIs that appealed to the emerging cohort of buyers and trendsetters. Oh man reading that I just realized that was exactly describing the type of consulting gigs I always get (and I'm young). Are we a side effect of the pump-and-dump VC culture or is this a legitimate new way of developing software/products?
    • lelandbatey 14y ago
      Well, I'm not finding a lot inherently wrong with using new and existing apis to make other things. I would in fact argue that that is why we create apis. However, I feel like people aren't very upfront with the fact that they are building on top of APIs. For whatever reason, there's this perception that arranging existing resources into a more valuable arrangement is somehow not a valid approach. I'd love to hear others thoughts on this.
    • stib 14y ago
      We're living in the future of software development that Brad Cox described in 1986 in his book on Objective-C and "Software ICs".
  • notahacker 14y ago
• swartzrock 14y ago
  From his own quoted post: "I lived through 8 years of a non-reading president along with everyone else. I know that the brogrammers out there are constantly getting texts from their buddies to plan the weekend's broactivities..." Thanks Professor, now I don't have to continue reading your post – ie, you're kind of a jerk.
  • emin_gun_sirer 14y ago
    Do you know which president I had in mind? I lived through quite a few 8 year terms, and yes, that includes Reagan. If your response is "but everyone knows which president you were referring to," then surely it's fair game to refer to whoever that is since the facts are universally accepted? :-)
    • richardjordan 14y ago
      The comment thread is only just getting started and there are already two comments about why they didn't bother reading. The TL;DR generation has another skill - finding ways to rationalize why they didn't tax their brains with the effort of reading. Mostly they're of the format "I read x in the first few lines so it disqualified the rest of the article from further attention". I think there's a new qualification for TL;DR - DFIAT - didn't fit in a tweet.
    • swartzrock 14y ago
      Dang, I been tricked! Seriously, though, it's not in our nature to take counsel from folks who act disrespectfully. The quip about a non-reading president and "brogrammers" fits that.
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• gesman 14y ago
  That's a deal between Yahoo management and Summly investors. Lucky young guys got themselves warmed up in the middle of big guys hugging each other.
  • richardjordan 14y ago
    Yes. Yes it is. +1 So much of what goes on in transactions in Silicon Valley has little to do with the headlines and a lot to do with power brokers and their interests. It's a shame we don't have investigative journalism in Silicon Valley any more - partly because it's out of vogue nationally, and partly because Silicon Valley journalists love to hob-nob with investors. I'd love to see a follow-the-money on this deal.
    • gesman 14y ago
      It's not necessarily "wrong". It's just the way this machine operates. In fact I think it will be beneficial for Yahoo's future, but not for the reasons PR and news stories are hyping it. The problem for Yahoo now is to explain it to investors who takes it all at face value.
• pron 14y ago
  This post is full of anger, desperation and disdain, but of the exquisite kind, and the kind I agree with, so it's great!
  • deleted 14y ago
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  • talkingquickly 14y ago
    Fantastic mini example of the point the author makes about TLDR's I started reading your comment (first 9 words), nearly stopped reading it thinking "they don't get it," carried on for some reason and 5 words later it showed that I agreed with you completely!
    • pron 14y ago
      I was just trying to test my non-artificial intelligence at sentiment analysis and text summary :)
• thescorer 14y ago
  TL;DR
  • pron 14y ago
    :)
• alaskamiller 14y ago
  Overpaying for apps is the new overpaying for social networks for that vague master bullshit artistry of "reaching" users. Yahoo irrationally overpays for tons of stuff, AOL irrationally overpaid for Bebo, there was that high school girl that made a social network and makes millions of dollars so she bought her mom a house, there are plenty of other data points I filed away in my head over the years. Tons of things happen in Silicon Valley everyday that makes no sense to outsiders, or sometimes even to those stuck in the tunnel. Are you new here? Sit, enjoy a cup of tea meanwhile. Throw on top of that the youth obsession in tech has been around since I was 17 eleven years ago and it will continue to stay. Youth is forever a distraction that you have to grow out of. If you don't then consider seeking a therapist. Your brain hurts from trying to neatly organize this particular liquidity event as fair? Maybe you can't. Maybe it doesn't matter. Get over it, stop the hating, and get back to work. Funny enough, mainstream media with old talking heads are spinning this narrative two ways: 1) the ever louder need to get every child to learn to code and 2) it's so fun bit of escapism to think what you would have done with big money when you're still a teenager contrasted against the $325MM Powerball win in New York. All in all, this barely registers as a blip on the average American considering real shit that's ongoing with fairness over marriage equality in SCOTUS.
  • rdouble 14y ago
    It's more like Yahoo! is overpaying for app development teams. They have to, as they are way behind in mobile and nobody good wants to work there.
    • samstave 14y ago
      EXACTLY! I've been saying this for the last three years here on Hn: Yahoo is stupid to not be aggressively and heavily spending their massive cash reserves to buy back into an innovative place here in the valley. Mayer is no dope! She knows that being the convoluted portal that Yahoo is, is a death sentence. They need to act quick and fast and often. Buying up a very young tech upstart is a good step toward splicing in some new, nimble DNA - which Yahoo needs desperately. $30MM is also a marketing number! Remember when everyone's exit plan was Google or Facebook? Well, add Yahoo to the list for exit acquire players.
• pan69 14y ago
  This is my (pessimistic) take on this Summly thing. I think the following scenario happened: 15 year old kid does something with computers and for some reason the press is all over it. Some smart investors thinks; "hey, I can use this to make money". They invest money into this 15 year old which gives him more press coverage. Wait a few years and the investor gets his buddies at Yahoo to buy it for a substantial amount of money. Ka-ching, money in the bank.
  • bitcartel 14y ago
    Surely you mean Ka-Shing ;-) The first investor was Horizons Ventures, the investment arm of Hong Kong billionaire Li Ka-Shing, who put in $300k.
    • devcpp 14y ago
      Mr. Ka-Shing himself, sure. He oversees every single investment his firm makes. I totally believe this. Besides, we don't know Ka-Shing isn't reading TechCrunch all day.
      • gwern 14y ago
        You usually don't get to be a billionaire without spending a lot of time in the office and working pretty hard. To give some apropos examples: Marissa Mayer is reportedly going over every Yahoo hire; _In The Plex_ mentions Page doing the same thing at Google.
        • bitcartel 14y ago
          His first Internet adventure was back in 2000... http://news.bbc.co.uk/2/hi/business/655740.stm http://news.bbc.co.uk/2/hi/business/655740.stm "Police had to step in to keep order among investors queuing to buy shares as the internet gold rush swept dramatically into Hong Kong. A crowd of about 30,000 people formed outside one of the few banks where small investors could apply for shares in internet firm tom.com. ... Thousands of investors pushed and shoved through queues stretching back as far as half a mile to hand in their forms at the worst hit HSBC branch in Kowloon. Analysts have predicted that the Hong Kong firm's share sale will prove to have been a record 2,000 times over-subscribed."
• jpdoctor 14y ago
  > By definition, Yahoo's directors know how to spend Yahoo's cash reserves best. This is absolutely incorrect. There are many instances in which there is a personal financial connection between a board member and an acquired company. For example, a board member is a limited in a VC fund. Didn't bother reading after that.
  • pron 14y ago
    Ironic. The post says: "But it's really not ok to act functionally illiterate when you're not actually illiterate, when an advanced society that once put a man on the moon worked so hard to educate you." If you'd read the text more carefully you wouldn't have missed the sarcasm of the passage you were so quick to dismiss. He was being sarcastic!
    • bcoates 14y ago
      I didn't see any sarcasm about that; through the rest of the essay he seemed to continue to take at face value that Yahoo's management is doing what they think right for Yahoo. The summly acquisition being some sort of self-dealing fraud would contradict his entire point.
  • richardjordan 14y ago
    I think you're supposed to have read irony into that comment. If you had bothered reading after that you would have seen that. That and the author's critique of people who can't be bothered reading more than a few paragraphs - in your case presumably because your default assumption is that you must know more than the author of the article and that he cannot possibly have been making a sophisticated point that would take more than that single sentence to unpack.
  • darkchasma 14y ago
    By definition, even if you include your statement, Yahoo directors know how to spend Yahoo's cash reserves best. It may be for their own best interest, but your statement doesn't contradict the OP's.
  • mbetter 14y ago
• niggler 14y ago
  What's actually right about Yahoo's purchase of Summly: we are still talking about it, and are still reminded that Yahoo exists. The marketing was great (the video is really well-done), and to be honest yahoo really could use some marketing boost at a time like this.
  • rdl 14y ago
    I'm reminded Yahoo exists every time I check my false-negatives spam filter training file. Virtually all spam which gets through to my inbox is from Yahoo addresses, often from compromised actual people I need to receive mail from (including at least one partner at a fund, my dentist, etc.)
• richardjordan 14y ago
  Ouch. Still, hard to find fault with the analysis, no matter how unpopular it may be with much of the readership of HN. Many folks here would love to sell a company to Yahoo! for $30MM after 18mo with minimal engineering effort and download numbers probably below those of many folks reading the news on HN.
  • theklub 14y ago
    We should all be very happy. This is a sign that easy money is still out there for the clever individual. I applaud the kid for what he has done. Yahoo might be stupid, but we've known that for a long long time.
    • photorized 14y ago
      There are several factors at play there. It's the parents, the backers, and all the personal connections between them and Yahoo execs. This deal is not about the tech, or the kid. The kid does sound smart though, so I am happy for him.
    • richardjordan 14y ago
      I hear what you're saying, but the problem with poor deals like this which are done for reasons other than the headline reason, is that they're effectively random. You cannot structure your business in order to get an exit like this. You tend to luck into one - or more often you get it because you have a network of unpublicized connections who have interests that are not overtly clear. The rest of us? We should be happy when money is going to solid, well-built businesses with metrics we can all understand rewarding us for hard work and innovation - because unless you're already an insider, that's the only thing you can control to get a win.
• powertower 14y ago
  I dont understand why the current wave of criticism is leaving the market penetration (and 1st mover advantage), brand, and million users (and climbing) out of the picture - like it's not important. And are assuming that Yahoo must of paid it all to hire 3 people.
  • cube13 14y ago
    Uh, the end result is that Yahoo paid for all of it to hire 3 people. The app has been pulled from the app store( http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-acquire-summly http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-ac... ), and it does not sound like it's going to be back. Which is a disappointment, because I wanted to know exactly what the heck the app is, since I've never heard of it before. So Yahoo's dropped any market penetration, the entire brand, and the million users. For 3 engineers and a few software API licenses.
    • powertower 14y ago
      My bad. I did not realize they were shutting them down.
• azm1 14y ago
  The point is to dig up something cool in the vast universe of information and actually deliver it. It is nice there are friends and university Professors who knows about this certain technology way deeper but can they _really_ deliver ? Sure, they will teach other kids and those kids will teach others or maybe going to be employed at some tech company. This kind of success is just more potent a visible. It really depends from what angle you look. This guy has financial, educational and social success. From standpoint of the startup culture, I think he's done very well. Anything can be judged only by comparison to something else.
• 6ren 14y ago
  A common motivation for acquisitions is to buy users, not technology. YouTube used PHP and the video tech in flash - but they were the ones to grow the userbase (and continue to do so). If Summly had the product/marketing to be popular and growing, that's why Yahoo bought it. (though it seems Summly doesn't have the strong network-effects of YouTube, of gaining both producers and consumers). EDIT they could be buying market-product fit...? but yes, if they killed it... hmmm...
  • Trezoid 14y ago
    Considering that yahoo immediately killed the product, and that its 1mill total users read 90mill summaries in ~18 months (that's less then 1 a day) I'd say they aren't buying users.
• rdouble 14y ago
  All of Yahoo! is "bolt on engineering." It's clearly not an entirely losing strategy as Yahoo! is still around, somehow.
• ed56 14y ago
  To the author: Would you have not taken a buyout offer from Yahoo! if you were in this kids position? All HN discussions regarding this topic have just screamed jealousy/disdain. It is as if people come to HN to read an intelligent argument to argue for their immature feelings. Also, the most important premise in your argument, that their technology was licensed, is incorrect. Their natural language technology was 100% proprietary according to them, and not "licensed from SRI" [0]. [0]: http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-million-buy-you/ http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-mil...
  • xradionut 14y ago
    To truely understand what's going on here you have to follow the money. All of the money. This is not a simple story of a hard working smart kid winning the tech lottery with a hot app/technology going from rags to riches. This is an arranged marriage, a PR stunt and a good-ole-boy deal all rolled into one. It's a VC fuck-you to all people that truly have innovative ideas, viable businesses, and dedicated employees that are trying to get management to notice solutions instead of golfing with "consultants" or blowing big money on solutions that could be built in-house for 1% of the costs. The kid was born on third base, got home on a wild pitch and some folks think he hit a home run.
    • jeremyjh 14y ago
      I wonder if Yahoo has got the rights to make a movie about this fairy tale. That's about the only way I can think of for them to cash-in. But it seems more likely that they just got sucker-punched.
  • rayiner 14y ago
    I should not you can be disdainful without being jealous and vice versa.
• minimax 14y ago
  So, what is Yahoo signaling to the world? "We value glue more than thought." What? No it doesn't signal that at all. Look at Yahoo's other recent acquisitions. Yahoo is buying mobile app companies. Spinning it as technology vs glue is silly. It's all about buying expertise in mobile.
• benastan 14y ago
  It doesn't seem to matter what the app does or how its built. The story goes something like (a) people (yahoo) want mobile apps (b) the kid got investors to give him cash (c) people downloaded it generating 'buzz' (d) more investors and cash (e) more downloads and publicity (f) yahoo plays right into the hands of the investors and the hype around a young founder (g) yahoo buys the company, making the kid a millionaire, it's a PR grand slam, bringing more publicity and 'users' to the app (for now) It works out really, really well for the investors and founder; in my opinion it seems like Yahoo got duped.
  • cube13 14y ago
    >yahoo buys the company, making the kid a millionaire, it's a PR grand slam, bringing more publicity and 'users' to the app (for now) There aren't any new users getting added. The app's been pulled from the iOS app store. http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-acquire-summly http://summly.tumblr.com/post/46247554262/yahoo-agrees-to-ac...
• JumpCrisscross 14y ago
  "But it's critical to keep tabs on the ratio known as 'glue versus thought.' Sure, both imply progress and both are necessary. But the former is eminently mundane, replaceable, and outsource-able. The latter is typically what gives a company its edge, what is generally regarded as a competitive advantage." I am in finance. I am glue. I take existing people, things (read: capital), and ideas and bolt them together. Glue is the socioeconomic fabric that gives value to ideas, things, and ultimately people. It's not just finance. Craigslist? Airbnb? Facebook? Apple? Glue. Put it this way: if you walked out the door with their source code, how much of their value could you replicate? Put it another way: how much would you pay to walk out the door with their source code and physical assets? Put it another way: how much would you pay to walk out the door with their source code, physical assets, and low to mid-level developers but none of their senior guys? We have laws to protect intellectual property because thoughts and technologies are copyable, fungible, and ultimately outsource-able. We don't need such laws to protect relationships, the gluiest of glues. In fact, we need laws to break down their strength.
  • acchow 14y ago
    > It is the socioeconomic fabric that gives meaning to ideas, things, and ultimately people. What are you saying? Google, Craigslist, the Museum of Natural History and Earnest Hemingway have no meaning without glue like finance?
    • JumpCrisscross 14y ago
      The people that connect people, things (i.e. capital), and ideas are not naturally less valuable than the people that come up with ideas or who have things. If you have someone who is able to whip together existing technologies into something that's tractable they very well can be more valuable than someone who invents new technologies all day. There is more information needed beyond "that's glue, it's worthless".
      • jjoonathan 14y ago
        > The people that connect people, things (i.e. capital), and ideas are not naturally less valuable than the people that come up with ideas or who have things I don't think anyone would argue that glue is naturally less valuable. The problem is that our current economic structure treats glue as if it creates approximately ALL of the value because we haven't figured out a good way to split value between different stages of the pipeline (IP isn't a good way). Over-investing in glue is bad insofar as it comes at the expense of investing in fundamental technologies/research. Since our (over)valuation of glue currently places a rather heavy opportunity cost on performing said research and endorses the "academia is a waste" attitude, I tend to agree that our economy is too focused on glue.
• dvt 14y ago
  Article screams of "you jelly?" And most of us are, indeed, jelly. The bottom line is, if you're into start-ups, you understand that in many ways it's a lottery. Instagram won last week, then Pinterest, and now Summly. This is the norm. Over-paying for products that aren't really even products. I'm surprised a professor at Cornell hasn't understood the VC culture yet. I was talking to a friend last week about this cute chick he wanted to introduce me to. Turns out she works at a relatively famous startup in L.A. as a secretary. It also turns out that she makes more than my mom (who's a research chemist). I've just learned to /sigh, move on and then quickly get back to work. Throwing money around is how Silicon Valley works. Get used to it.
• alexvr 14y ago
  As a fellow 17-year-old, I have nothing less than respect for Nick. You're obviously doing something right if you sell your company for $30M before you're an adult. Who cares if he's not an AI researcher? The scholar who wrote this article can't bash this kid's product until he actually builds something useful. If he came up with a revolutionary AI theory, great. But the people who take an experimental idea and see the value in it are the people who change the world. Einstein came up with some good theories, but nobody will remember his name when someone uses the theories to create a time machine. Are we going to ridicule Tesla Motors for making (highly innovative) cars because they licensed the steering wheel or navigation system from another company?
  • dombili 14y ago
    > The scholar who wrote this article can't bash this kid's product until he actually builds something useful. What kind of logic is that?
    • WalterSear 14y ago
      17-year-old logic.
    • alexvr 14y ago
      It's not logic. I just think it's messed up to ridicule someone for making something cool and getting a nice payday for it.
  • iso8859-1 14y ago
    Be careful starting out with the age bomb in a forum full of "grownups" :) Yeah, he did something right. But the article didn't question that. The analogy to Tesla is not fitting because Tesla actually does innovate.
    • alexvr 14y ago
      I should have known better about the age thing. I know it's a stretch to compare the two, but Summly seems more innovative than "a unique new social network" if you know what I mean. I give the kid tons of credit.
• johnrob 14y ago
  Yahoo should not be surprised when future prospective employees would rather work at or found a startup.
• frozenport 14y ago
  Yahoo is a media not a technology company. Can you recall something Yahoo has done innovative?
  • avelis 14y ago
    The fact is that technology is in almost every facet of the world. However we view Yahoo!, they must know that technology is foundational relationship to cultivate and enhance.
    • frozenport 14y ago
      idk, their core asset may not be their technologies. Their asset maybe the ad space they sell and the properteis they own. I think of Yahoo in as in the buisness of owning things so they can sell adds. I don't think they care about the technology of this app (which is less then a masters thesis) compared to its user base.
  • kev009 14y ago
    They're not too shabby at engineering. Heard of Hadoop?
    • frozenport 14y ago
      Certainly I know some people of U of I who worked on it, but Hadoop isn't developed for a Yahoo user. It is used mainly for serving ads and doing market analysis. A normal Yahoo user reads their mail and the sports page. Google makes its bread by facilitating advertizements on other peoples websites - it provides these kinds of technologies to other people. How they put up advertizements is their choice. Google's clients are responsible for content. Yahoo is more about providing media, they happen to make revenue with their own internal advertizements. Google's primarily goal isn't to own every computer screen, they just hope that their ads make it to every screen. Yahoo's goal is to fill every screen. For Yahoo buying screen space is a end in itself.
  • CodeCube 14y ago
    pipes?
• rayiner 14y ago
  If "brogrammer" is a thing, this picture is next to its definition in the dictionary: http://hackingdistributed.com/images/egs-small.jpg http://hackingdistributed.com/images/egs-small.jpg
  • talmand 14y ago
    Why, because he's wearing sunglasses? Color of his shirt? He has short hair? Is near water? Which is the trigger?
    • rayiner 14y ago
      The Oakleys, the beach, the looking off to the side. It's not any one thing, it's the totality of the circumstances.
      • emin_gun_sirer 14y ago
        For the record: not Oakleys, not at a beach, but yes, looking to the side. If we're done picking on looks and personal issues, something I tried to avoid very carefully in the article, perhaps we can focus on content and ideas?
        • rayiner 14y ago
          Not picking on anybody. From your pic you look like a brogrammer who codes by day, and slays on the LES bar circuit by night. Or am I missing the sense in which we're using "bro" here?
          • RickHull 14y ago
            > From your pic you look like a brogrammer > Or am I missing the sense in which we're using "bro" here? I'll bite. You are completely missing the sense of brogrammer. Brogrammer refers to behavior and attitude and not looks or activities.
            • 14y ago
• api 14y ago
  What this really underscores is that conventional capitalism provides little incentive for fundamental innovation. All this stuff we're gluing together is the product of state-funded research, mostly from the cold war era. DARPANet, the web (CERN), DARPA research on "augmented human intelligence," etc. Stuff like: http://www.youtube.com/watch?v=yJDv-zdhzMY http://www.youtube.com/watch?v=yJDv-zdhzMY (I bet you thought Xerox PARC invented that stuff, right? Or Apple? Nope. DARPA and SRI invented the entire modern user experience in the 1960s.) Few companies ever fund that kind of thing. There's two reasons. One is risk vs. reward-- such projects are typically "high risk, high payoff" as DARPA likes to say. Most lead nowhere. The second reason is that there is no good mechanism for monetizing the result. Fundamental innovations are often too fundamental to patent effectively, and are easy to copy once understood. They're also often worthless in themselves. They are enablers of value that is built on top of them. Fundamental innovation is a lot like infrastructure -- something else free market players seldom invest in. This is a problem for today's generation of enthusiastic free-market proponents. Who is going to pay for the next generation of innovation? It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-Lee, is he a billionaire? No, we have 17 year olds making quick millions gluing together the work of dozens of Ph.D's who will never see that kind of money in their lifetimes. It's a big thing that turned me off the Ph.D path. I don't feel like taking a vow of poverty and toiling in the dungeons to develop some fundamental, difficult concept that someone else then takes, glues to something else, flips, and gets rich.
  • BCM43 14y ago
    It's also very unjust. Where were Douglas Engelbart's billions? Tim Berners-Lee, is he a billionaire? No, we have 17 year olds making quick millions gluing together the work of dozens of Ph.D's who will never see that kind of money in their lifetimes. I'm not sure this is fair. Look at the number of entrepreneurs that actually succeed, then look at the positions that people with a CS Ph.D actually end up in. On average (using a median), I'm willing to bet those with a CS Ph.d do a lot better than your average startup founder. We just hear about success stories. All of this is also ignoring the huge benefits that come with becoming a professor, if you are able to. The kind of pay, job security, and benefits that come with the MIT professorship that Berners-Lee has are enormously beneficial to ones peace of mind.
• dgbsco 14y ago
  I've never felt so guilty skimming an article.
• escherba 14y ago
  What surprises me is that the same people who complain about patents and intellectual property are often the first to bring up the discussion of how market tends to undervalue fundamental research. You can't have your cake and eat it too.
• gyom 14y ago
  I like his point about how trivial "tl;dr" summaries often don't get at the core idea of an essay, but they still work for news formats which are kinda "tl;dr" already.
• OGC 14y ago
  A point or question missing from the article (i think): So, downloads for a free app are essentially a competely empty metric?
• at-fates-hands 14y ago
  The decades of anything being built from absolute scratch are long gone. You can essentially say we've hit the ceiling in terms of technology.
  • wmf 14y ago
    The author of this rant created a NoSQL database that's so much better than MongoDB no one believes him. So he probably doesn't think we've hit any kind of ceiling.
• mindcrime 14y ago
  What this really underscores is that conventional capitalism provides little incentive for fundamental innovation. I'm not as convinced as you may be, but there certainly seems to have been a decline in past decades, in terms of private funding for basic research. At one time, Bell Labs, Xerox, IBM, HP and others did quite a bit of basic, fundamental research. IBM still do, last I saw, but here's the question... if it made economic sense to fund private, basic research in the past, what has changed? WHY don't the HP's and Bell Labs, and Xerox's of the world still spend as much on research. Note: I am, of course, talking out of my ass here, as I have no actual objective numbers to support the idea that private funding for basic research is diminishing. But, subjectively, from what I read, see reported, hear, etc., it sure seems to be the case. All this stuff we're gluing together is the product of state-funded research, mostly from the cold war era. DARPANet, the web (CERN), DARPA research on "augmented human intelligence," etc. That's probably true, but there is a danger in looking at the past on a macro level and saying "this means the future must be $THISWAY". The problem is, we don't know what the other outcomes could or would have been. If DARPA had not funded all of that research, we cannot say that the same innovations would not still have been developed via other sources. History, IMO, hints at conclusions, but it's hardly a definitive guide to the future.
  • drcube 14y ago
    >... if it made economic sense to fund private, basic research in the past, what has changed? The monopolies were broken up. Now companies have to fight for their market position today rather than their position tomorrow.
  • JonnieCache 14y ago
    “Based on the NYSE index data, the mean duration of holding period by US investors was around 7 years in 1940. This stayed the same for the next 35 years. The average holding period had fallen to under 2 years by the time of the 1987 crash. By the turn of the century it had fallen to below one year. It was around 7 months by 2007. Similar pattern exists in the UK also as shown in the chart above. There the average duration has fallen from around 5 years in the mid-1960s to less than 7.5 months in 2007. Over the past 15 years even in international equity markets, holding periods have fallen. The Chinese market was red hot until few months ago. However the duration for the Shanghai stock market index is close to just 6 months.This shows that Chinese investors do not have a long term horizon.” http://topforeignstocks.com/2010/09/06/duration-of-stock-holding-period-continues-to-fall-globally/ http://topforeignstocks.com/2010/09/06/duration-of-stock-hol...
• dr_ 14y ago
  I've never used Summly but perhaps it would have come in handy when reading this article. Many businesses have been built by riding on the backs of others. A good number of them have already been mentioned in the discussion here. Many others have also tried, and failed. And have lost both time and capital in the process. Lets not forget something here - a 17 year old kid licensed technology from SRI and then developed this app. How many 17 year old kids do you know who would even think to do something like that? It's certainly not something that ever crossed my mind as a teenager. Obviously Yahoo sees something in him (them) that many others don't. Can't comment on whether its the right move or not, but just look at their stock price since Mayer took over.
• guelo 14y ago
  > For 95% of the news I read, that can be done with a regexp that slices out the first sentence. Interestingly, that seems to be what Google News does for its summaries. It works well most of the time but I've seen some screw ups. Also interesting, Mayer worked on Google News so she probably knows this topic well.
• vnkatesh 14y ago
  So what he means is that the iPhone, which is essentially 'glued on' technological device, is unmarketable?
• billsix 14y ago
  That article was way too long to read on my device. A summary, 1/8 of the length, would have given me all of the necessary information.
• topherjaynes 14y ago
  I thought a good bit about the reflection of TL;DR. My Gut reaction was to think we're heading to an idiocracy, but it could be people just getting smarter. Trust me I love the virtues of deep reading, but think of all the knowledge you could gain if it was done well? There is an entire business about providing executive summaries on books, news, and other important bits of information that we're inundated with. While I would cringe at a TL;DR for The Brothers Karamazov, I think there is some merit to being able to get a lot of tidbits quickly from a lot of news source. Would be very interesting to compare Fox, NYTimes, and the Washington Post on their 'gist.'
• noonespecial 14y ago
  Perhaps the license from SRI is the valuable part and for some reason, it conveys intact with the sale? What would SRI charge to license to Yahoo vs a 17yo kid playing "my first startup"?
  • astrec 14y ago
    That was my initial thought too. We're a cynical pair.
• teyc 14y ago
  Summly as a technology play is only moderately interesting. What I suspect though is Yahoo desperately needs new users. We know that most Yahoo visitors use Yahoo out of habit from the 90s. Where are the new users? Having a young man with penchant for both technology and publicity be the public face of Yahoo the same way as Marissa did with Google gives Yahoo a slightly better edge. I expect Nick to be groomed for bigger things. Congrats.
• greenyoda 14y ago
  "Finally, it doesn't matter how much money Summly got or whether Yahoo wasted its money." Yahoo shareholders might disagree on this point.
• graycat 14y ago
  The OP seems to be calling for bringing unique, new, powerful, valuable technology to information technology (IT) products, presumably as a way to faster progress for civilization. If so, then okay. But: Given a claim of such technology, an investor doing 'due diligence' has to evaluate it. Then if the investor is a venture partner (VP), they have to consider the 'guidelines' they agreed to with their limited partners (LPs) and for the investment maybe 'explain' to the limited partners. Then the LPs have to 'judge' the accuracy of the due diligence. But, the VPs and LPs don't like to do, or get involved with, such things. Instead they just prefer to "let the market decide". Are the VPs and LPs wrong? From some data posted recently by Fred Wilson at his AVC.com, apparently they are wrong: The numerical data seems to say that in recent years the 'venture capital asset class' has done significantly less well than an index fund or the S&P. For more, the financial value of the coveted, honored, respected, celebrated "unique, new, powerful, valuable technology" in IT doesn't have such a great track record at least in the sense that it's not easy to find the yachts. Can take this situation as either a slap in the face of the hopes of financial gains from research or as a great, wide open field, free of competition, for such gains from research. One argument for the research is that what the venture partners are looking for is exceptional; if a venture partner gets 2000 contacts from entrepreneurs, evaluates 100, and invests in 3, then clearly they are looking for something exceptional. Well, looking for value in "unique, new, powerful, valuable technology" from research should be a promising place to look for something exceptionally good (in ROI). However, look at two more points: First, what does it take to evaluate research? For one important case, we know well: In school mostly it takes a Ph.D. committee that, for each Ph.D. granted, spends maybe hundreds of hours in close work and evaluation. Then after school, for a submitted paper, there are reviewers, editors, and editors in chief, and they all play a role. To get to be an editor in chief is, from a Ph.D. and a good research record, maybe a 20 year effort. So, how are venture partners, rarely with a Ph.D., who don't really do research, going to do the work of reviewers, editors, and editors in chief, not just in one narrow field but in everything that might land in their in-box? They can't. Could they 'outsource' the evaluations? Maybe, but there would likely be risks there. Second, the VPs and LPs seem to be highly concerned that somehow 'the market' is some unpredictable, chaotic, inscrutable swamp where even the best research results can get laughed at and die. So, apparently so far in IT the investors just concentrate on 'let the market decide'. If 'the market' means that Yahoo writes a check mostly just for reasons of buzz, publicity, internal inspiration, etc., so be it. Could there be something else? Perhaps: (1) Get what one VP calls a "big ass problem" (BAP). So, if can get a good or much better solution for this BAP, then there should not be much question about virality, 'traction', happy users/customers, or 'product/market fit'. Or there is Sequoia's optimistic remark, "A huge market with customers yearning for a product developed by great engineers requires very little firepower.". (2) Do some research to get the solution. Or to modify the (1)-(2), get a list of BAPs and a list of research results likely can achieve or build on, and then pick a pair of a BAP and a research result that provides the needed solution. This pair picking is part of 'problem selection' and widely viewed as important for success. Then do the evaluation of the solution, possibly presented just on paper, e.g., much as in a journal article, but with a better organized approach than the peer-reviewed journals use. So, can such pair picking and evaluations lead to success? For success in the market, recall the BAP. For the success research promised, yes. Examples of this last? Sure: What the US DoD has done, with batting average much higher than the VPs, since about 1940. E.g., the USAF's GPS was the second version; the first was by the US Navy, with crucial early work at the JHU/APL in Maryland. The work was proposed essentially just on paper, and the rest is history. For another example, when the U-2 was shot down, the US wanted a replacement -- Mach 3+, 80,000+ feet, 2000+ miles without refueling. Kelly Johnson drew a picture, and the rest is history, right, the SR-71. Net, it really is possible to plan projects with "unique, new, powerful, valuable technology" and execute the plans successfully. VPs, LPs, listen up. Net, likely a better solution would be for researchers to talk of the value of their work at media parties on their yachts, 250+ feet long. Or "money talks". Or, the VPs and even the LPs have been known to rush for 'the next big thing'. Well, a few IT researchers with $1+ billion exits could be a 'next big thing'. Funding for such work? Well, just do an MVP by licensing some code from SRI or some such, put a mobile app in front of it, get a lot of publicity, sell out for $30 million, and then use that cash to fund the real project. So, that would be a $30 million Series A where the VPs get 0% for a project without yet even a single dollar of revenue, user, or line of code! Researchers, believe me: When your serious project is the next big thing and you are worth $1+ billion, your little MVP $30 million weekend will be forgiven! Whatever we do, currently we are crawling like a snail and, instead, very much need to get going, and VPs and LPs need to be part of it for all concerned including themselves.
• lmg643 14y ago
  Do we know that the purchase agreement did not include a multi-year license to use the SRI technology across yahoo, or are we just reading a lot of wild speculation? It is altogether possible that yahoo made a foolish purchase, but it is also possible that they made a great purchase and we are just guessing at the details and assuming that all $30 million went to the staff they acqui-hired.
• Choronzon 14y ago
  Actually extracting metaphors via Natural Language Parsing of Ulysses interests me far more than yahoo blowing money or some lucky kid winning the lottery.If its not an isolated example the field is more advanced and interesting than I suspected. I dread to think what parsing Finnegans Wake would be like.
• chx 14y ago
  This is the second article from the same author that is well reasoned and factually incorrect (the first was the MongoDB hate). Check http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-million-buy-you/ http://blogs.wsj.com/tech-europe/2013/03/26/what-does-30-mil... to see there is some research going on there. Also, glue or not, a successful mobile, one that has an audience is worth some money...
• babuskov 14y ago
  Whoa, I had an idea creating something like that in 2011. And I thought "it's stupid, noone would use it except me" and "google or yahoo would probably build a much better one and have 10x more engineers iterating on it". Which brings me to the point: Why did Yahoo buy this, instead of building it themselves? Are they really that thin with engineering talent?
• dr1337 14y ago
  To see why Yahoo is doomed, let's compare and contrast Yahoo's recent acquisition of Summly with Google's DNNResearch. Summly - Sloppy mobile app that licenses technology from SRI. DNNResearch - Groundbreaking fundamental CS Research into Deep Neural Networks that won Merck's Kaggle Competition. Enough said. Edit links - http://techcrunch.com/2013/03/12/google-scoops-up-neural-networks-startup-dnnresearch-to-boost-its-voice-and-image-search-tech/ http://techcrunch.com/2013/03/12/google-scoops-up-neural-net... http://blog.kaggle.com/2012/11/01/deep-learning-how-i-did-it-merck-1st-place-interview/ http://blog.kaggle.com/2012/11/01/deep-learning-how-i-did-it...
  • cpeterso 14y ago
    SRI would probably have charged Yahoo more money to license the technology than SRI charged Summly.
• spoiler 14y ago
  Am I the only one who is not surprised Yahoo! bought it? I'd be surprised if Google, Apple, Adobe, Microsoft or some other respected company did it. I mean who really uses Yahoo! these days anyway? The only good thing that they still have to offer is YUI (most notable is its compressor). I don't want to sound like a Google supremacist (although I might be guilty of it), but Google offers a better search engine, a better mail service (people use yahoo mail only for traditional reasons). To me this just feels like Yahoo! wants to join the "we <funded|bought> this awesome <product|service|project> created by this <16...22> old." (I hope) Other companies did it because it improved their service. Yahoo did it so it would be talked about. I could be wrong, and $30 mil. might be a lot for an attention whoring attempt (let me just point out that it's successful so far), but what else do they have to do with the money they acquired with their past success. Summly version: Yahoo! bought us in an attempt to save its stale ass from Oblivion. [If anyone is reading this, they are probably in the gutter (down vote) section of the thread... Welcome to the dark side, we lied about the cookies.]
• michaelochurch 14y ago
  I'm sure a lot of people are resentful or disgusted that a 17-year-old was acquired for $30 million. I just find it fucking hilarious. It's awesome, not in some dipshit "American Dream" sort of way, but in the "holy shit, this world is on crack" sense of it. I say, go him! The next time I am looking for work I am seriously considering getting rid of the resume and coming up with a bullshit startup name. It's pretty ridiculous that my "acq-hire" value in a startup with a bullshit product would be about 50 times the market salary for someone at my level of skill. (I've seen enough inside numbers to know that this is not an exaggeration. Acq-hire values are $2-4M for mediocre engineers and $4-10M for good ones.) One could do major social-proof arbitrage by offering cuts (of future acq-hires) to people in the tech press. I am dead-fucking-sure this is already happening. It must be. The stakes are too high, and the players too degenerate. On to the main point: yeah, it is terrifying that large corporate cultures are that desperate for innovation. I feel like they suffer the same problem as command economies. The natural information-theoretic incompetence of central authorities makes them slow to respond to anything (including especially their own creeping obsolescence, for which they compensate by purchasing external talent at extreme prices) but overreactive once they do.
  • muzz 14y ago
    Did you read the article? In paragraph 4 he specifically tells us he takes the founders age off the table.
    • michaelochurch 14y ago
      I know that the OP did take it off the table. I'm not doing so. It's important, and here's why. I'm sure he's extremely talented. Most 17-year-olds aren't programming at all. However, this is an HR acquisition (they're shutting Summly down). What exactly does a 17-year-old have that merits a $30m hiring bonus? I'm not ragging on him, at all. I think it's great for him. He had the opportunity and took it. That's awesome. But... what are Yahoo's executives thinking? When DE Shaw hires Putnam Fellows, they start them at $150-200k. Not $30 million. They have to work their way up to that. I'm not asking this out of resentment, because I don't care. Yahoo could have acquired him for $500m and I wouldn't care. I'm asking that out of honest curiosity. If you're that desperate for talent that you're hiring 17-year-olds (very good 17-year-olds, no doubt) with a $30m hiring bonus instead of a much more reasonable, I don't know, $500k, then what did you do so wrong as to get there? See, I'm sure there are economic reasons for large companies to buy goofy startups for $7 million per engineer. But that's a sign that either (a) they're all seriously underpaying their people, and it's systemic across the Valley, or (b) their internal cultures are so stifling of creativity that they're desperate for innovation, and the only thing they can come up with is to massively overpay "credible" people from the outside instead of developing internal talent. I suspect that it's both (a) and (b). In fact, I've been inside enough short-sighted, badly-run companies to know that it is. It's of personal interest to me. Companies are literally in headline-making death throes because they can't get people like me, and when one of us shows up-- we aren't that rare, maybe 1 in ~100 software engineers-- they treat us like shit. It's bizarre. Here's a proposal to all the large corporations out there. For a mere $2500 per hour I, Michael O. Church, will tell you how to unfuck your inefficient, talent-stifling culture. CEO of a megalith that can't hire good people without a 5-million-per-engineer acq-hire? (Actually, you probably have good people-- some much better than I am-- but the dopey middle managers keep you from seeing their talents. Fire them. That'll be $175.) I will help you change that. All you have to do is listen to me. After 200 hours (that's a mere $500k) you will no longer to acq-hire at $5-10m per engineer to get good teams. You'll be able to do it for $3m per engineer because people will actually want to work for you. Or, better yet, you'll be able to get good people the old-fashioned way. Mark Zuckerberg is young and rich, but he actually built a free-standing company. So it's not as ridiculous that he's worth billions, given that the work (possibly not the code, but the ongoing business process) is still in use.
• kefs 14y ago
  A few reviews of Summly, the app. http://www.cultofmac.com/199513/summly-actually-quite-good-news-summaries-for-free-review/ http://www.cultofmac.com/199513/summly-actually-quite-good-n... http://www.phonesreview.co.uk/2012/11/05/summly-app-may-fail-the-news-limelight/ http://www.phonesreview.co.uk/2012/11/05/summly-app-may-fail... http://www.reviewsontherun.com/all/type-of/reviews/summly-ios/ http://www.reviewsontherun.com/all/type-of/reviews/summly-io... (Trimmit) http://www.fastcompany.com/1772823/15-year-old-creator-trimit-app-makes-regular-old-entrepreneurs-seem-slackers http://www.fastcompany.com/1772823/15-year-old-creator-trimi... (Trimmit) http://appadvice.com/appnn/2011/07/quickadvice-trimit http://appadvice.com/appnn/2011/07/quickadvice-trimit And some pre-acquisition hype: http://allthingsd.com/20121213/mobilemobilemobile-yahoo-eyes-hipster-teen-founded-summly-news-app/ http://allthingsd.com/20121213/mobilemobilemobile-yahoo-eyes...
• chebert 14y ago
  I'm jealous of this kid.
• usablebytes 14y ago
  The beautiful girl Jenny falls for Chris and marries him. I think she has made a terrible mistake; it's natural to be jealous. But I keep the feelings to myself.
• usablebytes 14y ago
  The beautiful girl Jinny falls for Chris and marries him. I think she has made a terrible mistake; it's natural to be jealous. But I keep the feeling to myself.
• onan_barbarian 14y ago
  It's amazing how many column-inches, irate blog posts, etc. can be generated by a off-the-record "sources close to the deal said that the deal was worth $X million" remark from one source. Having seen this for a Y Combinator exit (no names) where the bullshit factor was around 10X (according to what I've heard from actual insiders vs the Techcrunch leak), I find it hard to get too exercised about it or to understand why anyone else is so worked up.
• stevewilhelm 14y ago
  Someone should put a reminder in their Google calendar to ask whoever is CEO at Yahoo at the their 2014 annual shareholder meeting what the Summly team has done for the company over the last twelve months.
• jskrablin 14y ago
  I suggest reading Fahrenheit 451... similarities with TR;DR problems outlined in the article are striking, at least.
• jval 14y ago
  I just finished watching an interview with D'Aloisio on the huge 7.30pm current affairs show here on the ABC in Australia (unimaginatively named 7.30). The interview opened with the newsreader restating the fact that he had been covered on the front page of almost every major newspaper. Then here he was, talking to her on TV, talking about Yahoo, and their amazing 'focus on mobile' etc etc. Suddenly it dawns on me - I live in Australia. Australia is practically the other side of the universe. Yahoo has a fresh faced 17 year old kid talking to just about every living room in this country about how focussed they are on mobile. Every country in the Western world from the US to Australia and beyond, front pages of newspapers, prime time TV interviews on government owned ad free broadcasters during primetime - no amount of PR spend can buy this. I know the PR rationale was mooted, but nobody could have imagined it would be this big.
• mattbarrie 14y ago
  I doubt the acqui-hire was for $30m. I would believe probably $3m, structured as $1m each over 4 years, with each person getting 100k in the first year, 200k in the 2nd, 300k in the 3rd and 400k in the fourth. Lots of these "acqui-hires" get reported in the press at some stupid number. I know a couple that were reported way off. The original journalist says "it sounds better", and then all the secondary sources just quote the figure from the first.
  • foobarqux 14y ago
    Are the reported numbers that you are familiar with outright falsehoods or are they distortions like an unrealistic earn-out provision? Besides spreading the amount over many years what other tricks are used to bump up the reported number?
• rythie 14y ago
  The only justification is, that the team (all two of them) can generate $30m+ of new revenue for Yahoo.
• YPetrov 14y ago
  While I don't disagree with this opinion, I believe that there is also a positive side of the problem and I have expressed my opinion here - https://news.ycombinator.com/item?id=5447184 https://news.ycombinator.com/item?id=5447184
• INtraNodZ 14y ago
  ITS WACK!
• parnas 14y ago
  it's about comfort zones, my 17-yo will take out the trash, but only to the screened in porch, not to the can. He also won't walk around the corner to get the can if it is still in the driveway, he will leave the trash exposed to racoons on the deck near where the can is supposed to be. Comfort zones...
• kunai 14y ago
  Wait a second. Can the founder even code? It would be particularly impressive if he had written the backend and then hired his team for frontend and design. If all he had was an idea, this is really nothing to marvel at, especially on HN. Interesting why Yahoo chose to buy him and his team. PR? Maybe.
• tdr 14y ago
  KeenSkim created it's own tech - will soon launch an iPhone version https://www.keenskim.com/static/KeenSkim_iPhone_app.htm https://www.keenskim.com/static/KeenSkim_iPhone_app.htm https://www.keenskim.com/ https://www.keenskim.com/