Kara Swisher

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Franken-Yahoo No. 19? Yahoo Eyes E-Commerce App Platform Lexity.

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According to sources close to the situation, Yahoo is close to buying e-commerce app platform Lexity.

While it is not clear how close the deal is to fruition, it would return to Yahoo one of its well-regarded techies, Lexity CEO and founder Amit Kumar. He had worked at Yahoo for many years, focusing on search and semantic advertising, including inventing SearchMonkey there. He then went to semantic advertising firm Dapper, which was later bought by Yahoo.

Kumar then left Yahoo again to found Lexity — formerly Vurve — in 2009. According to its website, the startup “will build apps that help merchants with customer acquisition, retention and monetization.” That includes Lexity Live, which offers all kinds of data about store traffic and more.

Lexity, which is based in Mountain View, Calif., and also has a labs unit in India, has raised close to $6 million from angel investors like Esther Dyson, Joshua Schachter, Vish Makhijani and Ash Patel and also venture outfits including Spark Capital, True Ventures and 500 Startups.

If consummated, the purchase will be Yahoo’s 19th since CEO Marissa Mayer took over a year ago. She has mostly bought a disparate collection of startups, most in the mobile space, for small sums, although she did fork over more the $1 billion to acquire blogging platform Tumblr.


It’s not entirely clear what Mayer’s overall integration strategy is — one post jokingly called the myriad of acquisition efforts “Franken-Yahoo” — except to acquire a lot of talented entrepreneurs to help turbocharge innovation at Yahoo. While the company certainly has seen better recruiting of late, most of the techies involved would likely not have joined the Silicon Valley Internet giant without their startups being acquired.

Agreed one person inside Yahoo: “We’re acquiring talent, plain and simple, using the checkbook strategy.”

Yay for VCs everywhere, I guess.

Yahoo PR declined comment and I have not heard back from Kumar, but I first got wind of the deal — which has checked out — from a tweet I received today.

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