Yahoo Continues Startup Buying Spree

Two recent acquisitions—Summly and Jybe—underscore the Sunnyvale, Calif.-based company’s strategy to expand its mobile services

Two recent acquisitions-Summly and Jybe-underscore the strategy of Yahoo Inc. (Nasdaq: YHOO) to expand its mobile services.

The Sunnyvale, Calif.-based Web company acquired Jybe Inc., a Menlo Park, Calif.-based application services provider, on March 20. Days later, on March 25, it picked up Summly, a news-sharing application founded two years ago by Nick D'Aloisio when he was just 15-years-old. Summly will be integrated into Yahoo's mobile service, along with Jybe, a social recommendation site founded by former Yahoo employees two years ago. Jybe suggests to Web users different types of books, movies and restaurants based on their preference.

The price for Jybe remains undisclosed, while the price tag for Summly is believed to be at $30 million. Both deals highlight Yahoo's strategy to broaden its mobile segment as a response to the rapid acceleration of smartphone and tablet usage.

Other recent purchases include Stamped, a mobile application developer and the first acquisition under new chief executive Marissa Mayer, who took the post in July 2012. Yahoo followed up with a deal to buy OnTheAir, which specializes in broadcasting video, in December. In January, Yahoo picked up Snip.it, a San Francisco-based company that allows users to clip news articles in a fashion similar to scrapbooking site Pinterest. It followed that up with Propeld, a Seattle company known for developing an application called Alike, in February.

"She's going after small companies, not large ones, which is a good practice," says tech analyst Rob Enderle of the Enderle Group, citing Mayer's focus on M&A growth. "But you want to retain the talent." Too often, a large technology company may lose the value of the acquisition because the talent within the target leaves once the company is integrated with the buyer, Enderle explains.

For more, see "Consumers Drive M&A in Digital Media."

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