6 ms·

Yahoo Acquires Qwiki For Around $50 Million

74 points by kunle 13y ago

longwei 13y ago
"Yeah, let's go shopping"
deleted 13y ago
[deleted]
kevin818 13y ago
Does anyone know if these types of acquisitions are as simple as, "hey I like this company, let's email them with an offer price and see what they say", or is it more of "hi, we like your company, can you please send us your earnings, forecasts, expenses, etc..."? For anyone out there that's had suitors/offers, I'd love to know what the process for this kind of thing entails.
- dakimov 13y ago
  Before they make an offer, they will perform a complete assessment of your company, it is called "due diligence". They do not easily throw money at you.
  - larrys 13y ago
    Due diligence typically refers to the process after an offer is made and accepted to ensure things are what they are supposed to be. http://www.investopedia.com/terms/d/duediligence.asp http://www.investopedia.com/terms/d/duediligence.asp http://www.merriam-webster.com/dictionary/due%20diligence http://www.merriam-webster.com/dictionary/due%20diligence I will note that this differs from what wikipedia says is due diligence. https://en.wikipedia.org/wiki/Due_diligence https://en.wikipedia.org/wiki/Due_diligence Unfortunately most of the information that is needed for true "due diligence" is not going to be possible until signing a contract or perhaps a letter of intent (which means very little of course).
    - dakimov 13y ago
      It looks to me that your references contradict you. How many companies have you sold? I do not know whether the due diligence is supposed to be done after an offer, but when you are negligible to a company that will possibly acquire you, they just propose a due diligence and maybe a deal, or no deal. What would you choose?
      - justin 13y ago
        larrys is correct; due diligence (as it applies in corporate M&A) occurs after a term sheet or letter of intent is sent and accepted, and is the process of verifying that everything the other party said was true. Further, your question "How many companies have you sold?" is rude and irrelevant.
        dakimov 13y ago
        Sorry, I tried to look smart talking about things I did not know enough about. I sometimes do this because I am very frustrated, as I am your age and have not done anything significant with my life. It gives me a huge amount of butthurt looking at people like you, as you are my age and a seasoned entreprenur, rich, happy and successful, and I am a miserable failure. Sure you know how due diligence is done, probably you have had time to be good at knowledge and experience in business, while your employees whom you have made money from have been working barely seeing the sun. Are all those people THAT worse than you to justify the income discrepancy, or are they worse than you at all? Do you consider yourself superior to the people who are of your age or older and are still working as employees? This seems so fucking unfair to me that people like you get THAT amount of money and life enjoyment. Are you really THAT good, that better than the people who are not entrepreneurs? Looking at people like you, I suppose you believe you are extremely smart and special and the way you life turned was the only possible way. The human world is so fucked up. By the way, I do not think that the question "How many companies have you sold" is that rude, I was just trying to find out whether the person speaks from their experience or not. And definitely it is relevant. So go fuck yourself, smarty pants.
      - larrys 13y ago
- deleted 13y ago
  [deleted]
- ameen 13y ago
  Sometimes its based on revenue, growth potential or growth itself, etc. Although, This seems to be an acquihire to get to the technology and employees. And the product AFAIK, didn't really get the traction they were hoping for.
- larrys 13y ago
  "these types of acquisitions are as simple as" Can also be that the target is the one that approached Yahoo either directly or through an intermediary.
- csmajorfive 13y ago
  In my experience, it's neither. It's a series of conversations about a potential shared future. The most analogous process is dating.
- reeses 13y ago
  It depends on the situation. Normally, due diligence involves opening (and auditing) books, assets, etc. This is generally focused on valuing the company and may be a long, protracted, affair or a cursory,"these are not the droids you're looking for," check for any crazy liabilities or Potemkin villages. In a given strategic landscape, the number will be multiplied by some factor. For example, if facebook bought a, twitter bought b, google bought c, d may end up getting pre-emptive offers from microsoft, yahoo, and other suitors. It may or may not be a rational move. In other cases, a "unique" offering may be snapped up on the news that a competitor is sniffing around. It can get crazy, with offers bumped up by hundreds of millions of dollars.
ivanist 13y ago
> In another display of their intent to buy the entire Internet Sounds accurate to me..
ameen 13y ago
Based on most of their recent acquisitions (Tumblr, Summly, Qwiki) I'm inclined to believe that they're working on some sort of an automated(?) product for the publishing industry (New Media, perhaps). I just wish Yahoo's acquisition spree doesn't end badly with employees leaving, because the IP really doesn't seem to be worth anything (in the case of Summly, Qwiki, etc).
- camus 13y ago
  > I just wish Yahoo's acquisition spree doesn't end badly with employees leaving Right now it is just short term pump and dump. There is 0 strategy. It will only end up with employees getting fired due to Yahoo executives mistakes.
  - obviouslygreen 13y ago
    Without being present in the relevant board meetings, it's hard to say this with any realistic certainty... but it certainly does ring true given the hulking, festering mass of anecdotal evidence Yahoo keeps leaving in its wake.
  - cududa 13y ago
    And precisely how many of the CEOs of the acquired companies are you friends with? Three of my friends companies have been acquired by Yahoo, and I quite like Marisa's strategy, as well as the talent she's bringing on
  - foobarqux 13y ago
    Mayer has some performance-linked bonuses and the acquisitions probably some how improve them. So it isn't an executive mistake per se but rather misaligned executive and shareholder incentives.
- minimaxir 13y ago
  What are the odds of that strategy having a positive ROI? It seems like Marissa is calling a Hail Mary.
josh2600 13y ago
Yahoo is building a content engine. In a play on the 'chicken returning to the egg' strategy, Yahoo recognizes the negative regression of the Internet towards portal sites driven by Facebook. This is the original trend that got Yahoo going in the first place, and what is the thing that always wins in Yahoo land? Content. Content is king in that land of Yahoo and summarization of a neverending stream of content is a faster way to get more people to see more content and thus more ads. Yahoo is making a new portal, one built around summarization of personalized content.
- notatoad 13y ago
  >Yahoo is making a new portal Yahoo already has a portal - that's what their homepage is and it's hugely popular. The nature of a portal though, is to transport the user somewhere - they are taking all their huge number of pageviews and sending those users on to somewhere else. Yahoo's acquisitions seem to be the opposite of making a portal - they're bringing more and more of the content onboard, trying to turn their portal into a destination. or rather, buying up enough actual destinations that the portal can promote their own products instead of lucky third parties.
deleted 13y ago
[deleted]
Matt_Mickiewicz 13y ago
They raised $10.5m... probably at a $30-$40m pre-money valuation for their later stage, $8m round. Not a great outcome, especially if the investors had liquidation preferences.
- kapilkale 13y ago
  Not a great outcome for last round's investors. With a 1x liquidation pref, they just get their $10.5M back with some change on top. Pretty decent for everyone else- especially founders, assuming they've got a significant stake in the remaining money.
johnvschmitt 13y ago
<s>I'm sure Yahoo will become the true market leader of the internet by simply buying a few startups every month</s> I mean, it reminds me so much of "trophy wives". One does not simply BUY one's way into Mordor.
Keyframe 13y ago
How much cash does yahoo have and where do they get it? Are they profitable at all?
- aaronblohowiak 13y ago
  http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics Profitability Profit Margin (ttm): 82.55% Operating Margin (ttm): 16.44% Balance Sheet Total Cash (mrq): 3.01B
- spullara 13y ago
  Yahoo has been (nearly) continuously profitable since early this century. It often surprises people given the general negative feelings toward them.
  - Keyframe 13y ago
    It really is surprising, but I'm glad they found their way to stay alive and profit as well. Hopefully they'll make some sort of a bigger splash in modern era as well.
mikeash 13y ago
My Twitter feed has been lighting up with this. Not because the acquisition is all that interesting in and of itself, but because the app was developed by Chaotic Moon, and they're saying they never got paid. For example: https://twitter.com/whurley/status/352201365910593536 https://twitter.com/whurley/status/352201365910593536 Better start making popcorn.

74 points by kunle 13y ago

longwei 13y ago

"Yeah, let's go shopping"

deleted 13y ago

[deleted]

kevin818 13y ago

Does anyone know if these types of acquisitions are as simple as, "hey I like this company, let's email them with an offer price and see what they say", or is it more of "hi, we like your company, can you please send us your earnings, forecasts, expenses, etc..."? For anyone out there that's had suitors/offers, I'd love to know what the process for this kind of thing entails.

dakimov 13y ago
Before they make an offer, they will perform a complete assessment of your company, it is called "due diligence". They do not easily throw money at you.
- larrys 13y ago
  Due diligence typically refers to the process after an offer is made and accepted to ensure things are what they are supposed to be. http://www.investopedia.com/terms/d/duediligence.asp http://www.investopedia.com/terms/d/duediligence.asp http://www.merriam-webster.com/dictionary/due%20diligence http://www.merriam-webster.com/dictionary/due%20diligence I will note that this differs from what wikipedia says is due diligence. https://en.wikipedia.org/wiki/Due_diligence https://en.wikipedia.org/wiki/Due_diligence Unfortunately most of the information that is needed for true "due diligence" is not going to be possible until signing a contract or perhaps a letter of intent (which means very little of course).
  - dakimov 13y ago
    It looks to me that your references contradict you. How many companies have you sold? I do not know whether the due diligence is supposed to be done after an offer, but when you are negligible to a company that will possibly acquire you, they just propose a due diligence and maybe a deal, or no deal. What would you choose?
    - justin 13y ago
      larrys is correct; due diligence (as it applies in corporate M&A) occurs after a term sheet or letter of intent is sent and accepted, and is the process of verifying that everything the other party said was true. Further, your question "How many companies have you sold?" is rude and irrelevant.
      - dakimov 13y ago
        Sorry, I tried to look smart talking about things I did not know enough about. I sometimes do this because I am very frustrated, as I am your age and have not done anything significant with my life. It gives me a huge amount of butthurt looking at people like you, as you are my age and a seasoned entreprenur, rich, happy and successful, and I am a miserable failure. Sure you know how due diligence is done, probably you have had time to be good at knowledge and experience in business, while your employees whom you have made money from have been working barely seeing the sun. Are all those people THAT worse than you to justify the income discrepancy, or are they worse than you at all? Do you consider yourself superior to the people who are of your age or older and are still working as employees? This seems so fucking unfair to me that people like you get THAT amount of money and life enjoyment. Are you really THAT good, that better than the people who are not entrepreneurs? Looking at people like you, I suppose you believe you are extremely smart and special and the way you life turned was the only possible way. The human world is so fucked up. By the way, I do not think that the question "How many companies have you sold" is that rude, I was just trying to find out whether the person speaks from their experience or not. And definitely it is relevant. So go fuck yourself, smarty pants.
    - larrys 13y ago
deleted 13y ago
[deleted]
ameen 13y ago
Sometimes its based on revenue, growth potential or growth itself, etc. Although, This seems to be an acquihire to get to the technology and employees. And the product AFAIK, didn't really get the traction they were hoping for.
larrys 13y ago
"these types of acquisitions are as simple as" Can also be that the target is the one that approached Yahoo either directly or through an intermediary.
csmajorfive 13y ago
In my experience, it's neither. It's a series of conversations about a potential shared future. The most analogous process is dating.
reeses 13y ago
It depends on the situation. Normally, due diligence involves opening (and auditing) books, assets, etc. This is generally focused on valuing the company and may be a long, protracted, affair or a cursory,"these are not the droids you're looking for," check for any crazy liabilities or Potemkin villages. In a given strategic landscape, the number will be multiplied by some factor. For example, if facebook bought a, twitter bought b, google bought c, d may end up getting pre-emptive offers from microsoft, yahoo, and other suitors. It may or may not be a rational move. In other cases, a "unique" offering may be snapped up on the news that a competitor is sniffing around. It can get crazy, with offers bumped up by hundreds of millions of dollars.

ivanist 13y ago

> In another display of their intent to buy the entire Internet Sounds accurate to me..

ameen 13y ago

Based on most of their recent acquisitions (Tumblr, Summly, Qwiki) I'm inclined to believe that they're working on some sort of an automated(?) product for the publishing industry (New Media, perhaps). I just wish Yahoo's acquisition spree doesn't end badly with employees leaving, because the IP really doesn't seem to be worth anything (in the case of Summly, Qwiki, etc).

camus 13y ago
> I just wish Yahoo's acquisition spree doesn't end badly with employees leaving Right now it is just short term pump and dump. There is 0 strategy. It will only end up with employees getting fired due to Yahoo executives mistakes.
- obviouslygreen 13y ago
  Without being present in the relevant board meetings, it's hard to say this with any realistic certainty... but it certainly does ring true given the hulking, festering mass of anecdotal evidence Yahoo keeps leaving in its wake.
- cududa 13y ago
  And precisely how many of the CEOs of the acquired companies are you friends with? Three of my friends companies have been acquired by Yahoo, and I quite like Marisa's strategy, as well as the talent she's bringing on
- foobarqux 13y ago
  Mayer has some performance-linked bonuses and the acquisitions probably some how improve them. So it isn't an executive mistake per se but rather misaligned executive and shareholder incentives.
minimaxir 13y ago
What are the odds of that strategy having a positive ROI? It seems like Marissa is calling a Hail Mary.

josh2600 13y ago

Yahoo is building a content engine. In a play on the 'chicken returning to the egg' strategy, Yahoo recognizes the negative regression of the Internet towards portal sites driven by Facebook. This is the original trend that got Yahoo going in the first place, and what is the thing that always wins in Yahoo land? Content. Content is king in that land of Yahoo and summarization of a neverending stream of content is a faster way to get more people to see more content and thus more ads. Yahoo is making a new portal, one built around summarization of personalized content.

notatoad 13y ago
>Yahoo is making a new portal Yahoo already has a portal - that's what their homepage is and it's hugely popular. The nature of a portal though, is to transport the user somewhere - they are taking all their huge number of pageviews and sending those users on to somewhere else. Yahoo's acquisitions seem to be the opposite of making a portal - they're bringing more and more of the content onboard, trying to turn their portal into a destination. or rather, buying up enough actual destinations that the portal can promote their own products instead of lucky third parties.

deleted 13y ago

[deleted]

Matt_Mickiewicz 13y ago

They raised $10.5m... probably at a $30-$40m pre-money valuation for their later stage, $8m round. Not a great outcome, especially if the investors had liquidation preferences.

kapilkale 13y ago
Not a great outcome for last round's investors. With a 1x liquidation pref, they just get their $10.5M back with some change on top. Pretty decent for everyone else- especially founders, assuming they've got a significant stake in the remaining money.

johnvschmitt 13y ago

<s>I'm sure Yahoo will become the true market leader of the internet by simply buying a few startups every month</s> I mean, it reminds me so much of "trophy wives". One does not simply BUY one's way into Mordor.

Keyframe 13y ago

How much cash does yahoo have and where do they get it? Are they profitable at all?

aaronblohowiak 13y ago
http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics http://finance.yahoo.com/q/ks?s=YHOO+Key+Statistics Profitability Profit Margin (ttm): 82.55% Operating Margin (ttm): 16.44% Balance Sheet Total Cash (mrq): 3.01B
spullara 13y ago
Yahoo has been (nearly) continuously profitable since early this century. It often surprises people given the general negative feelings toward them.
- Keyframe 13y ago
  It really is surprising, but I'm glad they found their way to stay alive and profit as well. Hopefully they'll make some sort of a bigger splash in modern era as well.

mikeash 13y ago

My Twitter feed has been lighting up with this. Not because the acquisition is all that interesting in and of itself, but because the app was developed by Chaotic Moon, and they're saying they never got paid. For example: https://twitter.com/whurley/status/352201365910593536 https://twitter.com/whurley/status/352201365910593536 Better start making popcorn.