Yahoo! Inc. (NASDAQ:YHOO) continues to execute its acquisition strategy, bringing in talents to help improve its profitability. This time, the tech giant is negotiating a deal to acquire Tomfoolery, a business app developer, for approximately $16 million, according to the Wall Street Journal based on information from two people familiar with the matter.
Yahoo discussion in advanced stage
The sources say Yahoo! Inc. (NASDAQ:YHOO)’s discussion to purchase Tomfoolery is already in an advanced stage, and it is expected to finalize a deal this week. If Yahoo succeeds in striking a deal, Tomfoolery’s team will join the fold including co-founders Kakul Srivastava and Sol Lipman.
Srivastava was a former Yahoo executive who helped manage Flickr, the photo-sharing service of the tech giant while Lipam was a former vice president of AOL, Inc. (NYSE:AOL). The executives established Tomfoolery in 2012. Their objective is to create apps for businesses to help their employees collaborate and socialize with each other.
Tomfoolery’s first software was called Anchor, a real-time conversation platform that allows groups to discuss work projects, and share files using simple apps for iPhones and Android devices.
Tomfoolery received $1.7 million funding from several investors including Andreessen Horowitz, Morado Venture Partners, David Dish, and from AOL, Inc. (NYSE:AOL) and Yahoo! Inc. (NASDAQ:YHOO) veterans including Jerry Yang, Brad Garlinghouse, Ash Patel and Sam Pullara.
Mayers prefers the “boomerang”
Since Marissa Mayer took over as CEO of Yahoo! Inc. (NASDAQ:YHOO), the company has purchased a number of startups including Aviate, which automatically arranges apps on a user’s home screen; Tumblr, a blogging site for $1.1 billion; and Summly, developer apps that make sharing of online news easier on mobile devices.
A majority of the startups bought by Yahoo! Inc. (NASDAQ:YHOO) have been focused on mobile to improve its monetization in this area. Observers in the technology industry believed that Tomfoolery’s talents are good fit for its mobile initiatives.
According to the Wall Street Journal, Mayer prefers acquiring startups and hiring professionals who previously worked at Yahoo! Inc. (NASDAQ:YHOO). Mayer refers to them as the “boomerang.” Last year, 10% of the people hired by the company were boomerangs including Jeff Bonforte who is currently supervising Yahoo’s email and other communication products.