I have a hard time believing that they'd pay $30M to gain five programmers.
That's a fairly standard acq-hire, actually. It's not just Yahoo that's paying over $5 million per head. It's ridiculous, when you consider that the value of an employment relationship (which can be ended by either party at any time) is set at 30-60 times the annual salary. (Just think about it: how is a relationship that lasts 4.5 years on average worth 50x salary?) As I said, either engineers are getting screwed, or acq-hires are signs of severe desperation and devastating information poverty. It seems to be both.
I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.
I am dead sure that there are a lot of amazing engineers at Yahoo. It's just sad that the company is so calamitously bad at recognizing talent at the bottom that it has to hire external 17-year-olds. I'm sure they have plenty of great people who'd be thrilled to do an NLP/R&D project for just their regular salary.
If I were at Yahoo right now, after this acq-hire I'd write Marissa Mayer an email:
Dear Marissa,
Hi, I'm Michael O. Church. My salary is now $500,000 and I have full autonomy to
work on whatever project I want. Based on the rate you are paying for external
talent, this salary is justified. I am dead sure I will deliver more
economic value to Yahoo than I take from it, but I will choose my projects
from here on out. If that is not acceptable to you, Friday is my last day.
If you're writing $30-million acq-hire checks for 17-year-olds, you should fire every goddamn middle manager, because your ability to recognize talent at the bottom is for shit.
It's not even five programmers - according to the news, only the founder and 2 employees are joining Yahoo. This is acquisition is fantastic news for the founder, but I'm still at a loss on how it can possibly be a good business decision for Yahoo.
I don't believe in "publicity" and "getting in the news" and "making Yahoo hip again" - for $30m, you could do much better. I don't really believe it's for talent either - they could have found much bigger and better mobile teams for that money if they wanted to.
The only two hypotheses that seem plausible to me are:
* SRI accidentally granted Summly a too broad and cheap license for their summarisation technology, and it's cheaper than licensing from SRI directly.
* The 17-year-old founder's parent is a Morgan Stanley executive, and the startup has high-profile investors. Some M&A exec at Yahoo went golfing with one of the investors, and decided to help an old friend cash out on his investment. The rest of the deal is just a side effect.
This is spot on. I'm certain this 17-year-old is incredibly clever, but you could hire an entire think tank of clever people to do nothing but innovative R&D for $30M. Hell, I'd take a significant pay cut if I could transition from coding around bullshit UI quirks to actually solving real problems.
Well, first they'd have to acq-hire me. I'm cheaper than $30 million, though.
I am seriously considering considering going into business as an "unfuck your culture" consultant. If you're at the point where you're paying $6 million per head for talent, then I'm a fucking steal at $2500 per hour [0]. Sure, I will talk your ear off for 200-400 hours over two months and bill you for almost a million, but I will solve your damn problem.
[0] That's my rate for large companies. Startups get a discount. Inquire within.
Without commenting on Yahoo! specifically, I think it's the case that sometimes companies become so dysfunctional they're beyond redemption. One company I worked at used to do contract work for Nortel. At one time it occurred to me: "you know this seems like stuff they could do in house, why are they paying us to do it?" Apparently the institutional bureaucracy was so bad no R&D-type project could get done internally. Of course the company filed for bankruptcy like a year or two later.
"I am seriously considering considering going into business as an "unfuck your culture" consultant."
After only six months and two gigs as a contract software engineer, I'm thinking about this too. So far I'm appalled at the state of play in the small software houses I've seen.
Many years ago I watched a tv documentary (probably BBC with the Open University) about business consultants.
There was a small - medium engineering company. These firms tend to be split between white collar office and management work, and blue collar shop floor work.
The consultant went in, had a bit of a chat with the management, and then went onto the shop floor. After a bit of resistance he got a lot of great information. When someone is sitting at a machine pushing a button for 8 hours a day one thing they know is what makes that harder and what might make it easier.
He got all these suggestions and put together a plan. All the blue collar staff were energised, active, keen to be involved. He then told them he was going to make a presentation to management. He asked the shop-floor workers what they thought would happen.
"They'll ignore you" was the reply. "No!" he said, "They'll see the work we're put in, and they'll see the benefits to them, and they'll put in some changes!"
He called the meeting. He gave his presentation. All the management sat, waiting for someone else to make a first move.
Obviously they did not agree with any of the suggested changes. They heard the story about the car factory worker who saved his company thousands with a simple bag over the licence plate suggestion. They didn't care.
"What you don't seem to realise is that we've already thought about all of this before we put the machines in" - it's like kaizen never existed.
There's a reason many work cultures are fucked.
But, you know, it is a good idea and I wish you luck if you try it!
PS: obviously the point is not "shop floor great, management bad", because I've met many lazy shop floor workers.
Given your comment history, and the way you seem to understand the bigger picture, I would not hesitate to go to business with you. So, let's get busy getting acq-hired. (:
That's a fairly standard acq-hire, actually. It's not just Yahoo that's paying over $5 million per head. It's ridiculous, when you consider that the value of an employment relationship (which can be ended by either party at any time) is set at 30-60 times the annual salary. (Just think about it: how is a relationship that lasts 4.5 years on average worth 50x salary?) As I said, either engineers are getting screwed, or acq-hires are signs of severe desperation and devastating information poverty. It seems to be both.
I've also read a few posts on this thread saying as much as "there are no smart people at Yahoo" or "everyone at Yahoo is an idiot" (paraphrasing). Coming from folks at HN I think these kinds of statements are really unbecoming. Of course there are a lot of amazing people at Yahoo. Tons of them.
I am dead sure that there are a lot of amazing engineers at Yahoo. It's just sad that the company is so calamitously bad at recognizing talent at the bottom that it has to hire external 17-year-olds. I'm sure they have plenty of great people who'd be thrilled to do an NLP/R&D project for just their regular salary.
If I were at Yahoo right now, after this acq-hire I'd write Marissa Mayer an email:
If you're writing $30-million acq-hire checks for 17-year-olds, you should fire every goddamn middle manager, because your ability to recognize talent at the bottom is for shit.