Originally Posted by chaz4wildman
I don't understand all the cheerleading. Really, it's an absurd deal, and it certainly won't help Nick's career.
He has $30m at 17 vs no money. I'd say that's a good career move. He has enough money that he can do whatever he wants for the rest of his life. He could invest $20m and turn it into hundreds of millions, maybe even billions over the course of his lifetime without lifting a finger.
There are valid points about Yahoo and competing software but not every decision made by a major company is going to be logical at face value. There's a clear publicity benefit from supporting a young student - every company wants to be in with students - and it will look like active changes are happening under the new management as your link points out.
The value goes beyond what the technology itself does. Apple paid $80m for Lala, which is iTunes Match now. They probably could have done that in-house or bought a much cheaper service but they decided to just buy that one. Same with Facebook buying Instagram for $1b.
It's the responsibility of the people writing the cheques to determine if the purchase is worth the price and some of the time, it's for the talent behind the purchase. Money has no inherent value, it can only be exchanged for things that do have inherent value and that's what Yahoo did. They exchanged a $30m pile of valueless money for a talented young employee, a lot of publicity and some software algorithms, which they may or may not have been able to replicate. If it doesn't work out like Microsoft's purchase of aQuantive, which resulted in a $6.2b write-down, they just write it off. For a company like Yahoo, $30m is not a lot of money, especially if it gets them some interest from the nearly 1 million people who downloaded Summly or people who follow the celebrity backers:
The good thing about these stories is they clearly show how to get rich in the tech industry: just work on something small but key to a company strategy, like the PageRank algorithm. Figure out what they really need, implement it well, raise awareness of it and they'll fall over themselves to throw money at you. Static money is no good, it needs to be spent on things that maintain growth. That's why Apple should be investing more instead of hoarding. They said they do make small strategic investments though and it takes time for good opportunities to arise. A lot of companies just won't even know about the software and talent that's out there unless it has enough publicity already.
Where it seems to work out best is when you align something that you are really interested in and put a lot of effort into with something that also happens to be one of these key technologies that large companies want. Steve Jobs didn't have to go back to Apple if he didn't want to. Mark Zuckerberg could have sold Facebook to Google, Viacom, News Corp or any of the big companies that offered money for it. Steve Jobs once said 'the only way to do great work is to love what you do'. I'm sure some people have done great work in return for money but it generally holds up. If you don't put any energy or passion into something, you'll generally do a poor job.
Given that Nick is working for Yahoo, he probably has an interest is what he's doing and people who are like that deserve to be rewarded. This is where you can see the failings in companies like Microsoft because there's no sense that the people there care enough about what they do. They can hold back the web, put out as much proprietary rubbish and lock businesses into their services so long as it protects the income. Google is mixed because they promote open software on the one hand but do it to give them control of their advertising streams. The motives are reflected in the quality of their work and when they perform badly, it leaves the door open to people who do things well. Bing has failed miserably to unseat Google search because what they've done looks and works just like Google search (I don't know why Google hasn't sued them for this yet). If Yahoo takes on a new strategy for search like Siri did on the iPhone, they could easily move up in popularity.
I actually think this would have been a good idea for Newsstand. Rather than subscribe to one publication, you'd tell it your interests and it would feed summaries of relevant articles into a wall of content and you'd be able to rank each article, like a personalised newspaper. It could be a single subscription and the subscription fee would be divided between the articles you read. If you read too many articles for your subscription level, it can cap the amount of articles that feed in. I actually don't use Newsstand at all because there isn't a single source of information that covers what I can get online. RSS helps but I still have to click though each article and there's no way for content creators to monetise it effectively.