Why Rockmelt could be a good buy for Yahoo

Yahoo announced this morning that it acquired Rockmelt, the social news browser-turned social news app company that’s been around for more than four years and has raised funding from some of Silicon Valley’s top venture capital firms.

So is the Rockmelt acquisition just another random acqui-hire by CEO Marissa Mayer and the latest addition to what some have called a collection  of “losers?” While it isn’t really clear that Yahoo has an acquisition strategy, as Mathew wrote earlier this month, at least on paper, this could turn out to be a good buy for Yahoo.

One of the reasons the company got a rumored $60 million price tag is because Rockmelt had an excellent engineering team and a lot of design talent, two areas that will be an immediate boost for Yahoo.  Tim Howes and Eric Vishria have strong backgrounds in tech and they’ll help Yahoo build the core talents it needs. In fact, they could become pivotal for the company’s plans for mobile. Of course, they’ll have to actually stick around Yahoo for that to happen.

RockMelt Co-Founder

What’s ironic is that Rockmelt shut down its web browser a few months ago when Yahoo’s search business could have used that browser. Even small and niche browsers generate enough search traffic through built-in search windows to make them worth keeping around. If Yahoo wants to stay relevant, it needs to be competitive in the browser space, even though it currently doesn’t have one. As Mayer asked rhetorically in January,  “Given that we do not have mobile hardware, a mobile OS, a browser, or a social network, how are we going to compete?”

With a little push from Yahoo, the Rockmelt browser could have become a player — at least a minor one, much like Yahoo itself is in the tech world. While the Rockmelt browser never really caught on, the founders can still take the core technology to Yahoo and put it to work.

The browser and the apps (which are also being shut down in August) could and should have been a good source of social data, and that’s a shame. Between social sharing data from Rockmelt, data from Tumblr on what people are re-sharing, its own content from Yahoo news, and the technology from the Summly acquisition, Yahoo could in theory create an excellent data driven and socially-curated front page. It would have been a good play against Flipboard and LinkedIn-owned Pulse.

Who knows, it might actually work out; especially if Yahoo takes advantage of the technology behind these acquisitions and puts its teams together in a way that builds competitive products.

Om shared his thoughts on this mini-podcast:

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