summly and founderIt’s the dream of many people (ones with tech skills and even ones without) that they could make an idea come to life that nets them millions. Yahoo just added another story to the growing list of people who fit that category. The company recently bought out one London student’s news app for millions of dollars. They’ve certainly made his day, but will he deliver for Yahoo?
$30 Million Idea
According to Paul Sandle this morning on Reuters, “Yahoo paid roughly $30 million” for 17-year-old Nick D’Aloiso’s Summly app. Summly was a four-month-old smartphone app which “distills news stories into chunks of text readable on small smartphone screens.” Since initial prototypes, the app has attracted investment from celebrities and others for quite some time. Talk about a million-dollar idea.
For D’Aloiso, this is obviously a fantastic occurrence. The kid has yet to finish high school and has already made his mark on the tech world. Yahoo thinks he and the handful of other employees at the company will have an opportunity to continue influencing the company and the internet as well.
Yahoo’s ongoing brand reset and refocusing has been going on since Marissa Mayer took the helm last summer. Mayer and the company want Yahoo to return to the relevance it once had, or at least stand up stronger to Google. Apparently purchasing the talent of a 17-year old is part of that strategy.
Peter Cohan on Forbes reports that “Yahoo plans to shut down Summly – although its technology may reappear on Yahoo.” Currently, the way Summly works it generates absolutely no revenue, so there’s no reason for Yahoo to re-deliver the service in quite the same way. It appears that Yahoo is betting on D’Aloiso’s appeal to the media, as well as to the celebrity investors that initially took interest in Summly. But is $30 million really worth it for some presumably good PR? I’m not too sure it is.
Something Better Come Out of Summly
Since Yahoo is shutting down the relatively well-received Summly, one would hope that Yahoo has plans to gain something worthwhile out of the technology and ideas of D’Aloiso. If not, it doesn’t seem like hiring a 17-year old as a spokesman is a great idea. Nicholas Carlson over at the Business Insider shares the same sentiment listing the many challenges and issues with the idea of “acquiring Summly’s talent.”
Then again, Yahoo has a hefty chunk of change on hand, around $4 billion in cash. It’s really not a huge deal if this deal goes completely bust and results in nothing for the company. That’s unlikely, given D’Aloisio has talent and Yahoo can always merge Summly and his talent into some sort of app or service which at least fans and users of Yahoo would want to utilize. Even better would be if they could monetize Summly so that agencies and businesses could find a way to advertise on the app, thus enhancing Yahoo’s marketing offerings in mobile.
For as much press as this story has been getting, I’m not really sure how much it matters to Yahoo or to many people on the web. Sure it’s a feel-good and interesting story given the amount of money spent on someone who isn’t even 18 years old yet, but until we see something practical and marketable out of the deal, it seems to me like Yahoo had some money to spend and liked a young tech kid’s ideas. I hope they prove me wrong though.
What do you think about Yahoo spending $30 million on Summly? Was it the right move?
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