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Yahoo Has Acquired Rockmelt, Apps To Shut Down On August 31st (opens in new tab)

(techcrunch.com)

69 pointsfloydpink12y ago109 comments

109 comments

48 comments · 9 top-level

orky5612y ago· 11 in thread

For those keeping score, this gives another win for Khosla Ventures, SV Angel, a16z, and First Round. Here's the tally for those who invested in companies that have been acquired by Y! since Mayer took over:

CrunchFund - 3 (Stamped, GoPollGo, Tumblr)

True Ventures - 3 (OnTheAir, Snip.It, Lexity)

Khosla Venture - 3 (Snip.It, Xobni, Rockmelt)

SV Angel - 3 (Snip,It, Xobni, Rockmelt)

Google Ventures - 2 (Astrid & Stamped)

Spark Capital - 2 (Tumblr & Lexity)

Jack Herrick - 2 (Qwiki & Astrid)

Greylock - 2 (Tumblr & Qwiki)

First Round Capital - 2 (Xobni & Rockmelt)

Also to note, Lexity & Jybe were founded by former Y! employees.

minimaxir12y ago

It should be noted that "win" is a relative term in Rockmelt's case, since there was only a $60-70M return on a $40M investment.

orky5612y ago

Fair enough. However for what is believed to be an acqui-hire and a team that has some lofty ambitions, I think the founding team and investors must have been happy that the team/product found a nice home.

CoachRufus8712y ago

Have they acquired any companies that were 100% bootstrapped?

orky5612y ago

Playerscale is the one off the top of my mind that was totally self-funded.

In addition, I could not find funding data on a few others when completing my research so not sure if self-funded or not: Alike, Loki Studios, GhostBird Software, Rondee, Ztelic

porterhaney12y ago

This acquisition reminds me a lot of Hunch. It's a similar size in terms of team + cost per team member. $2-3M/employee. And, Hunch's core tech seems to have gone into the eBay homepage, which is what Sarah is proposing Yahoo do with Rockmelt.

zhivota12y ago

That's true of Hunch at eBay, though it should also be noted that the new homepage was originally spearheaded by Milo employees, an acquired startup that also is creating new products in eBay (read analyst day reports and look for "eBay Local" for hints).

darkarmani12y ago

Why can't you poach employees for less than $2M each?

badclient12y ago

Other than Tumblr, it seems like all the other acquisitions were of companies that were on their way down.

Edit: Also add Lexity to the list with Tumblr.

orky5612y ago

That doesn't seem totally fair. To say they were on their way down is pretty negative. Sure maybe some of their explosive growth was slowing down but I know more than a few still had some tricks up their sleeves. Outside of Tumblr and Lexity, Astrid and Summly were poised to continue to innovate since the founders/team have products that continue to surprise.

At the end of the day, some of the startups are by founders who are pretty early in their careers (e.g. Summly) and would like to have a win under their belt. Yahoo's shopping spree seems to validate a lot of successful products not just in terms of popularity but also talent and product innovation.

fraserharris12y ago

Lexity was a rumoured $30 - 40m (AllThindsD) on $6m in funding with the business remaining active.

lotso12y ago

Lexity also had a business model and were solving a legitimate problem.

ForrestN12y ago· 11 in thread

Does anyone have any real insight into the strategy behind all of these acquisitions? Apart from blasé speculation about acqui-hiring (for what products?) and supposition that Yahoo executives are merely stupid, I'd be interested to understand the broader pattern. It's a real news story, and something is going on.

There is a strategy. What is it?

jusben136912y ago

Yahoo needs talent to succeed. Yahoo, in general, cannot compete with Google, Facebook or smaller startups for talent. They're better off now than they were prior to Marissa but they're still a definite second best. So they are buying talent to stock the shelves with first rate devs and leaders - mostly in mobile. At some point - say in 6 - 18 more months - talent may come to work for them to work with some of these smart people they're acquiring reducing their need to acquire companies at such a frantic pace. It's a smart strategy.

_greim_12y ago

Bear with me while I ask a dumb question. Why pay $70M to acquire a startup just for their engineering and technical talent? What's the going rate for a really good engineer nowadays, $150K? Why not just offer $180K? That difference adds up to a lot less than $70M.

nashequilibrium12y ago

This article might disagree with you:

Yahoo Keeps Buying Startups That Don't Make Their Own Apps http://readwrite.com/2013/07/03/yahoo-qwiki-lawsuit-chaotic-...

homakov12y ago

Why do they need talents? they need marketing strategy and profitable products, and a bunch of middle level engineer to implement it.

after all, talents can simply quit their jobs after acquiring

chimeracoder12y ago

Rockmelt has (had) a very strong leadership team (founders were very successful in the 90s), and a number of strong engineers.

It seems clear that this is an acquisition for talent, since they're shutting the product down with less than 30 days' notice.

For <$70MM, that could be a relatively cheap acquisition of talent that has proven their ability to make things (if not necessarily proven their ability to make a product that people want to buy - which is where Yahoo's responsibility and vision come into play).

badclient12y ago

For <$70MM (and for a company that raised $40MM), that could be a relatively cheap acquisition

How much money Rockmelt raised says little about how good of a deal Yahoo received. The reverse may be true: Yahoo may have had to pay way more than the real value simply to ensure a return to the investors, not because it valued the company at the price paid.

photorized12y ago

Many people were very successful in the 90s... It was way too easy, not necessarily an indication of talent or strong leadership.

pawrvx12y ago

Bail out the VC who sit's on public company boards.

joeblau12y ago

I think Yahoo just needs great engineers and acqui-hiring is a good way to get them quickly. I think that as long as Yahoo can keep the teams together, they have a good shot of building some great tools.

If I was to guess their strategy: Sumly + Tumblr + Rockmelt looks like a new content distribution system.

lonelycoder12y ago

Marissa's a woman. Women like shopping.

xj912y ago

Can the sexism, dumbass.

normloman12y ago· 9 in thread

Why does yahoo keep buying companies simply to acquire talent? Isn't it just easier to just post a job ad? I don't think there's a shortage of talented programmers working in social media.

Someone please explain.

hga12y ago

According to the article that this comment of mine discusses: https://news.ycombinator.com/item?id=6141238 that's the only way they've found to acquire mobile talent after treating it very badly in times past. Sounds like no matter how energetic the recruiting, people in this field aren't going to jump to them unless they have little or no choice.

Key sentence fragment: "In each instance, Yahoo has locked up engineers with two- to four-year contracts...."

droithomme12y ago

They could offer good work conditions and autonomy and get best of breed developers for $200,000, but they say that sort of salary is outlandish and they prefer to pay VCs several million per talent acquisition instead, claiming that makes more sense. But does it really.

badclient12y ago

Has Yahoo ever tried to offer $500,000+ to rockstar mobile devs? Until it tries that, it is lame to argue that it must get talent from deadpooled companies.

jack-r-abbit12y ago

But you always have a choice. Nobody can force you to be acquired... that would be slavery. The seller can require as part of the deal the buyer offer to keep a certain amount of people at a certain pay. Buyer can accept that deal or negotiate. But at the end of the day, every employee has a choice to sign the new contract or not. So anyone who got "locked up" in a 2-4 year contract did so because they felt it was a good move for them (or at least better than not having a job).

caw12y ago

Having never been in this situation, what stops a developer from signing and doing almost no work for Y! while they ride out their contract? I feel like if they get fired they could just claim that Y! didn't want to pay them, so they fired them instead.

jack-r-abbit12y ago

One thing could be that buying a team is worth more than buying a bunch of people to make a team. Not sure if that is always true.

hga12y ago

The OP to this https://news.ycombinator.com/item?id=6140982 mentions that Yahoo is going to some effort to keep them from being "rejected by the host" as previous mobile efforts and their employees have been. See the end of page 2 and beginning of page 3.

product5012y ago

To be honest, they are buying failed teams as most of the acqui-hires they've done are of companies which are struggling to raise their next round.

zalew12y ago

how does buying a team actually work - when the company gets bought from the shareholders, can't the employees tell yahoo to piss off and not sign new contracts? how does the process look like?

johnrob12y ago· 3 in thread

60-70 Million for talent? Wow. I suppose Yahoo is trying a novel approach to recruiting: target startup founders/employees, give generous equity offers (via acquisition price) as well as a 'win' on the resume (successful exit). I have to say, it's a pretty compelling offer...

hkmurakami12y ago

Not sure what level of talent is left at Rockmelt other than their founders. It hadn't been doing well for a long time so I imagine the cream of the crop had already left. (I know one such person who had already left for Google)

AznHisoka12y ago

They can easily get talent for much much less.. just by posting an ad in the "Who's Hiring?" thread. There are many talented people who want to join Yahoo, but feel HR/gatekeepers are too much of an obstacle to even apply.

rmc12y ago

Novel means new. This isn't new. This is an acqui-hire.

nilved12y ago· 3 in thread

Isn't it an immense amount of negative PR to buy an app and shut it down? Why does this keep happening?

unknownian12y ago

You think people actually cared about Rockmelt, the "social web browser"?

MartinMcGirk12y ago

I did for quite a while actually. I loved the social browser concept, but the fact that I couldn't get extensions like lastpass to work in Rockmelt killed it for me and drove me back to vanilla Chrome.

I still wished them well though, their product was good and their customer support was great. I'm sad to see the brand go away, but I'm pleased for them that they got acquired. Hopefully they go on to do well at Yahoo!

nilved12y ago

I don't use Rockmelt, but I did use Flickr and delicious. Yahoo is the touch of death for web applications and I've grown to resent their tendency to buy and ruin services I use. This case with Rockmelt is more of the same: I don't use it myself, but the people who do are now less likely to like Yahoo.

badclient12y ago· 2 in thread

If Marissa gave $70M to HN for acquisitions for Yahoo, who all would you guys acquire and why?

DannoHung12y ago

If I had any clue what their strategy actually was, I could give you a coherent answer.

mikeash12y ago

I'd buy my own company and split the proceeds among us, naturally!

parsabg12y ago

That's the most expensive set of Chromium extensions.

eldavido12y ago

I think a lot of this is a side-effect of it being socially unacceptable to have 10x (or more) pay differences between good and bad employees at tech companies. That sort of thing is tolerated on Wall Street, but not SV.

Prediction: SV business leaders will find a way to meaningfully tie pay to performance more than they currently can, and offer the best 3-5x what the average earn.

The current system is just too roundabout.

smegel12y ago

Yahoo better be planning something big after all these purchases.

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