Yahoo! Jumps into the Mobile News Game with Summly Buy

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Yahoo! buys news reader SummlyInternet search company Yahoo! has purchased the mobile news reader company Summly in a US$30 million deal as part of a move to boost its mobile presence. Summly has been around for about two years and was founded by then 15 year old Nick D'Aloisio.

Yahoo!'s senior vice president of Mobile and Emerging Products Adam Cahan said,

Mobile devices are at the center of how we engage with the people, experiences and interests we love. Across Yahoo!, we're focused on creating beautiful experiences that people are excited to use every day -- products that inspire and delight. We can't wait to work with Nick and the Summly team to do just that.

The idea behind Summly is to give mobile device users an easier way to read their online news by creating storie snapshots that can be quickly browsed with gestures instead of forcing touch-based controls to try to fit with interfaces that were designed for mouse-based devices.

Summly earned a spot on Apple's Best Apps list for 2012 and based its product on technology from SRI International, which is a Silicon Valley-based research company.

Mr. D'Aloisio said his five person team will be joining Yahoo! and that his iPhone and iPad app is being discontinued. "We will be removing Summly from the App Store today but expect our summarization technology will soon return to multiple Yahoo! products -- see this as a 'power nap' so to speak," he said.

While the Summly app is already gone from Apple's iTunes-based App Store, Mr. Cahan backed up Mr. D'Aloisio's comments that the technology behind it won't die. "Nick and the Summly team are joining Yahoo! in the coming weeks. While the Summly app will close, you will see the technology come to life throughout Yahoo!'s mobile experiences soon," he said.

The deal must still pass through the usual regulatory approvals before completion which Yahoo! expects will put the final closing in the second quarter of 2013.

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Yahoo! buys a small Internet news reader company to help boost its presence in the mobile device market for $30 million when it could've gone to SRI and struck a deal to use the same technology that drives Summly. It sure looks like Yahoo! was more interested in the Summly talent to boost its own services instead of their app.

With Google killing off its Reader RSS news aggregator and reading product, now is a good time for competitors to jump into the space, but unless Yahoo! plans on opening up the Summly tech so other developers can tie into it as well, it may be a hard sell since RSS fans are used to the idea of sharing and syncing their news lists between apps and devices.

If Yahoo!'s goal is just to beef up its mobile device development team, there are plenty of qualified developers out there that would cost far less than $30 million. Either there's a piece to this puzzle that Yahoo! isn't sharing, or the company just spent a lot more money than it needed to.

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