Media recruiters’ view on Summly selling to Yahoo: good luck

The news that Yahoo has apparently paid $30m for Summly is surprising. It is a clever app, but has a few problems.

The algorithm that is designed to condense long news stories into three smartphone friendly paragraphs often garbles prose and leaves the story and the reader hanging.

Often, the third par tends to end quite abruptly, as if the algorithm has run out of patience). It also presents a very limited range of news stories in a package that is quite tedious to navigate.

Presumably, Yahoo’s money will help sort these glitches out and do a bit to engage media recruiters by hiring a few people.

But the business model is heavily flawed – in that there isn’t one. In its current form, this is an app which is free to download, doesn’t charge subscription, carries no advertising, and charges no fee to its content providers.

So, in rolling Summly into its new suite of mobile first offerings, what might Yahoo do?

Advertising is the obvious easy answer: we are used to the interstitials in apps such as the Guardian’s, and just pass over them without a second glance. A swish of a finger and you are on to the next story. There is none of that annoying delay while you watch a sponsor’s message at the start of a video link; you can just skip over. Which of course is the problem. Advertisers want measured returns from their digital products. The trouble is app users don’t want adverts.

So do they make the publishers pay? I have long been mystified by the attitude of the publishers to Summly. Notably, Rupert Murdoch, who famously justified closing thelondonpaper and putting a pay wall around The Times online because he was philosophically oppose to giving away content for free, has done just that with Summly. He is one of the reported 250 content providers who have signed up to the app. While this explains some of Yahoo’s interest (250 publishers licensing their precious content for free is a hard act to ignore), the publishers’ attitude is unlikely to remain the same with the new proprietor. Murdoch, for example, had a huge row with Google about access to New Corp’s content.

So you come back to that old dotcom fixation, the audience. The app will be discontinued, and there is – in all honesty – not much to bring the Summly user to Yahoo. After all, what Summly does – aggregating content and presenting it in a summarised and hierarchical form – is not that dissimilar to what most other news outlets do. Once it loses its outsider status, there will be little to attract the previous user. If Yahoo does try to monetise through download fees or subscriptions – which is unlikley – they will alienate the audience even further. So you have to conclude that the company has bought Summly for its credibility, for its cache. For – and I hate to use the word – its cool

And this is the point: Yahoo is no longer, and is unlikely ever to be again, cool. The company has tried to reinvent itself endlessly since being overhauled by Google and others as the search engine of choice. In the meantime, over 13 years, its shares have slumped from $57.50 to $24 now (although this represents an impressive uplift from around $12 earlier this year). It would be an astonishing achievement by the new CEO, Marissa Mayer, to turn the brand around, and her early steps have been interesting. A smartphone-first strategy is certainly bold, but smartphones are operated by people who are very savvy about their content sources. And – as Summly proves – smaller, fleeter companies are much more capable of capturing that zeitgeist than large corporates. It is, after all, that which made Yahoo cool back in the 1990’s.

So, yes, we should definitely celebrate the success of a young British entrepreneur; but, no, I don’t think this will be the deal that resurrects Yahoo.

 

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Martin Tripp Associates is a London-based executive search consultancy. While we are best-known for our work in the TMT (technology, media, and telecoms) space, we have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.