Back in March Yahoo spent $30 million when it acquired Summly, a startup that had a London-based, 17-year-old CEO named Nick D’Aloisio.
Many thought that the deal was rather strange because the news aggregation app didn’t have many users, nor did appear to be bringing in a large amount of revenue. As part of the deal, Summly’s teenage CEO and the team were to join Yahoo, but Nick D’Aloisio was to remain in London and finish his studies. The announcement from Yahoo that Summly’s teenage CEO would help lead the company in mobile was greeted with a lot of confusion, especially considering that it had already been said that he would remain in London, thousands of miles from Yahoo’s headquarters.
Another reason that many found the entire deal to be a little strange is the fact that the Summly team were not the ones who invented the core technology behind the app, that was created by SRI which licensed it to Summly in exchange for equity. The Summly crew didn’t build the app either, that was a company called Somo.
Business Insider summarizes the whole bizarre affair, stating:
“So here is what Yahoo did: It “aqui-hired” a team of people, led by a 17-year-old living in London, that cannot claim to have invented a cool technology OR to have built a cool app. Yahoo does own the technology SRI invented for Summly, but it doesn’t own SRI, so it hasn’t acquired the team that can scale the technology for Yahoo. Odd.”
However recently a Yahoo insider has shed some light about why Yahoo forked out millions on the startup. It appears that the acquisition of Summly came about via a deal Yahoo made with SRI for “summarization technology” and the Yahoo insider stated that there were “agreements in place” with SRI for “knowledge transfer”. Until Summly was purchased by Yahoo, SRI International held equity in the small startup; interestingly SRI once also had equity in another startup that was acquired by a big company, that was Siri, which as you well know, was bought by Apple to become the iPhone’s iconic PA! The Business Insider states that inside Yahoo, Summly is often referred to as “Yahoo’s Siri”.
A source close to Yahoo claims that CEO Marissa Mayer feels that summarization technology is “going to be huge” as it will allow the building of “personalized news feeds” into mobile versions of core experiences.
The job of implementing this summarization technology at Yahoo won’t be handed over to the Summly team though, that will be up to Yahoo’s mobile organization which is headed by Adam Cahan.