According to a source close to the deal, the acquisition has indeed now closed, and Yahoo will officially announce it as soon as this evening or tomorrow morning. The intention was to put the news out at the end of this week or the beginning of next week, but with the story coming out already, the company has sped up the timing.
Tomfoolery’s existing business, including its Anchor app, will be shut down. Whether the concepts behind Anchor and the other things Tomfoolery was planning will be reborn as consumer or enterprise products at Yahoo is not clear.
All four co-founders — CEO Kakul Srivastava, chief product officer Sol Lipman, VP of platform Simon Batistoni and VP of mobile Ethan Nagel — will be joining Yahoo SVP Jeff Bonforte to work on products in Yahoo’s Communications division. Current products in the division include Yahoo Mail, Messenger, Groups, Contacts, Calendar, covering both the mobile and desktop versions.
It’s not clear whether all of Tomfoolery’s other 10 or so employees are coming over to Yahoo.
Bringing more product and engineering talent into Yahoo makes sense for the company right now. As I wrote earlier today when looking at Yahoo’s quarterly results and declining sales, it has put a lot of investment into building out its portfolio of services, but in a business model that is predicated on advertising, Yahoo will need to continue to do more of that product development to grow its traffic.
(And if it’s going to be predicated on something else, such as paid services, then those products will need to be built, too.)
There are some ties between Bonforte and Tomfoolery that point to this being an acquisition of a known quantity, so to speak.
Before leaving to start relationship and contact management startup Xobni — which was eventually acquired by Yahoo — Bonforte had been a Yahoo employee, working on search and communications products. Srivastava is the former GM of Flickr, where she oversaw the Yahoo-owned photo network during its biggest phase of growth, from 37,000 users to over 50 million. She also worked on Yahoo Mail in her time at the company. Batistoni helped to build the monetization and community aspects of Flickr.
A connection to another Tomfoolery exec appears to go even further back. One of Bonforte’s past roles was founder and CEO of i-Drive.com, an early player in online storage. According to Lipman’s LinkedIn profile, he had worked briefly at i-Drive, too. More immediately, before Tomfoolery, Lipman had been a mobile VP at AOL (where he joined after AOL acquired his startup Rally Up).
We are still trying to get our own confirmation on the price of the deal. The WSJ reported it as $16 million. If correct, that’s not a bad return for a company that had raised only $1.7 million from the likes of Andreessen Horowitz, David Tisch, and a number of Yahoo and AOL veterans including Jerry Yang, Brad Garlinghouse, Ash Patel and Sam Pullara.