You can see why the world's news media went for this story in such a big way. A mega-dollar buyout is the fantasy that inspires so many internet startups. That the buyer in Summly's case was Yahoo, widely perceived as some sort of underdog even though it's still the fourth most-visited website on the planet, doesn't do any harm to the narrative.
And it certainly doesn't do any harm to have a photogenic teen-boy founder who can look straight down the barrel of a TV camera and deliver a plausible-sounding business proposition, while a seemingly awestruck Stephen Fry sits nearby, to create a promotional video that's not the least bit creepy at all, no sir!
But remember that it's every startup's job, in its first year or two, to get attention and create that most valuable of online commodities, the buzz. You've got to get people talking, get media coverage, build a user base fast, and hope that venture-capital investors or an existing player picks you to be their sugar child.
Summly is clearly winning this game for now, but how about we scrape away the surface mythology?
Let's be clear. Young Nick d'Aloisio and his fledgling company haven't really written amazing new language-processing software. They've written a straightforward iOS application that links to natural language processing (NLP) software licensed from SRI International, an organisation spun out of Stanford University in 1946 to develop science and technology for "knowledge, commerce, prosperity, and peace". Translation? "Winning the Cold War for America."
SRI International has been doing NLP for decades. Some of its earlier work helped CIA analysts trawl through thousands of Soviet engineering documents by rewriting them into helpful summaries — just as Summly now does for news stories. More recently, it created a personal assistant that could respond to natural-language requests and called — well, how would you abbreviate "SRI International"?
Now look at Summly's about page, and notice the solid mix of experienced internet executives and celebrity-name advisers like Ashton Kutcher and Yoko Ono. Note, too, that there are other investors, so, despite the media impression, d'Aloisio didn't just pocket $30 million.
Cornell University professor Emin Gün Sirer is spot on in his blog post What's Actually Wrong with Yahoo's Purchase of Summly. The age of Summly's founder is irrelevant. Whether Yahoo is spending its $30m wisely is a matter for Yahoo. We need to get some perspective on what Summly actually does.
"Let's get some perspective here: Summly wasn't reading Ulysses by James Joyce and extracting the fact that the three-masted ship Leopold Bloom sees on the horizon is a metaphor for the Holy Trinity, and therefore represents the Catholic Church. It wasn't reading a 12-page article in Harper's and extracting the cleverest puns and pop culture send-offs lovingly embedded by a writer who is good at his craft and earning below his potential. And it wasn't taking my blog posts and somehow conveying the nuanced ennui I harbor for bolt-on engineering," Sirer wrote.
"It was summarizing news. Articles that are already written with a TL;DR in the first paragraph." (Emphasis in original.)
In Sirer's view, Summly is just another startup mashup.
"They are the quintessential bolt-on engineers, taking a Japanese bike engine, slapping together a badly constructed frame aligned solely by eyeballs, and laying down a marketing blitz. That's why the story sells. 'You, too, can do it.' But do you want to?" he wrote.
"In some sense, everyone is a bolt-on engineer ... Everybody stands on the shoulders of the giants that came before them, and all that. But it's critical to keep tabs on the ratio known as 'glue versus thought'. Sure, both imply progress and both are necessary. But the former is eminently mundane, replaceable, and outsource-able. The latter is typically what gives a company its edge, what is generally regarded as a competitive advantage."
All that said, there's still the question of whether Yahoo is getting value for its $30 million. Obviously, it thinks so. It's got to do something: Despite being the fourth most-visited site, Yahoo is way down the list when it comes to eyeball time. According to Alexa, Yahoo users spend 9 minutes per day on the site. Users of chart-topping Google spend 15 minutes on that site, and Facebook users some 28 minutes at Zuckerberg's pad.
Yahoo's recent purchases include a swathe of companies that'll help it reach the mobile market, or so it hopes. We shall see.
But, as Sirer notes, "If Summly is an innovative company worth purchasing, I have some news for Yahoo: My AI [artificial intelligence] colleagues have tricks up their sleeves that will blow your minds!"