Yahoo Buys News App Summly, Makes Teen a Multi-Millionaire
Yahoo CEO Marissa Mayer is in acquisition mode. After buying the mobile personalized recommendation service Jybe last week, the tech exec now is acquiring a mobile news reader developed by a 15-year-old.
Yahoo has picked up Summly, which offers an algorithm that generates summaries from hundreds of news sources, in a deal the AllThingsD blog pegs at $30 million. The developer, Nick D'Aloisio, is now 17 and a high school student in Britain. His app is a success with 90 million summaries read in just a few months, and he's an instant millionaire.
"Our vision is to simplify how we get information and we are thrilled to continue this mission with Yahoo's global scale and expertise," D'Aloisio wrote in a blog post. "After spending some time on [Yahoo's] campus, I discovered that Yahoo has an inspirational goal to make people's daily routines entertaining and meaningful, and mobile will be a central part of that vision. For us, it's the perfect fit."
Summly is a free app that was available for the iPhone. D'Aloisio believes his competitive differentiation is the ability to quickly browse multiple stories. Full articles take a long time to load; stories aren't always optimized for the mobile screen; and "snippets" pulled from the first sentence of an article often provide an incomplete picture of the article's subject matter.
With Summly, D'Aloisio offers an app that's optimized for the mobile screen. The app automatically determines the most relevant facts in a story and generates short summaries that help the reader quickly grasp the main points from diverse news sources, from The Wall Street Journal to ESPN. To read the full story, readers can then click through to the original article.
Greg Sterling, principal analyst at Sterling Market Intelligence, said Summly was a relatively popular and well-recognized news aggregation app.
"With Yahoo's emphasis on news and content and a new, big push into mobile it's obvious how it could add value to what Yahoo is doing," Sterling told us. "More questionable, perhaps, might be the price paid, which was rumored to be $30 million. There's also uncertainty about how long Mr. D'Aloisio will remain at Yahoo after his contract is up."
Last year, D'Aloisio's early prototype of a Web summarization app attracted the attention of various experts in the artificial intelligence, neuro-linguistic programming and machine-learning fields. To build today's fully fledged mobile news app, D'Aloisio partnered with several of them.
Summly is backed by several investors, including Horizons Ventures, Ashton Kutcher, Betaworks, Brian Chesky, Hosain Rahman, Joanna Shields, Josh Kushner, Mark Pincus, Matt Mullenweg, Stephen Fry, Troy Carter and Yoko Ono. Summly also won Apple's Best Apps of 2012 award for Intuitive Touch.
D'Aloisio said Yahoo was removing Summly from the iTunes App Store but he expected the summarization technology would soon return in multiple Yahoo products.
"Nick and team have cleverly re-imagined how content will be consumed on mobile devices," said Mary Meeker, a venture capitalist. "With the Summly app, not only does the 'who, what, when, where and how' of content rise to the top, Summly has the potential to create an ecosystem for the best content to be distributed more broadly."