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8 Tech Companies That Turned Down Huge Buyouts

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This week Snapchat founders Evan Spiegel, 23, and Bobby Murphy, 25, made headlines by rejecting a reported $3 billion offer from Facebook. They're holding out for something better. Here are eight more tech companies that rejected huge buyout offers. Some made the smart decision. Others, not so much.

1) Yahoo! rejects $44.6 billion offer from Microsoft (2008)

In 2008, Google was on the rise, and there was nothing anyone could do about it. In a last ditch effort, Microsoft rushed to defend against a Google global takeover by offering to buy Yahoo! for $44.6 billion. Yahoo! co-founder Jerry Yang felt the offer was too low and rejected Microsoft’s bid. Unfortunately, after the rejection, Yahoo! stock plummeted, Yang left the company, and Microsoft moved on. 

2) Groupon rejects $6 billion offer from Google (2010)

As Google’s global presence skyrocketed, the company sought to tap into local markets of the mom-and-pop variety in order to bolster profits. Naturally, Google shifted its gaze to Groupon, whose network had spread through North America, Latin America, and Europe. At the time, the company was gathering more than $1 billion in annual revenue. Google offered the company a $6 billion buyout, and Groupon CEO Andrew Mason rejected the offer. After the rejection, Groupon’s popularity waned and its profits bottomed out. Groupon fired Mason earlier this year.

3) Rovio rejects $2 billion offer from Zynga (2012)

Given the popularity of web games like FarmVille and CityVille in 2012, Zynga was on the hunt for the next big thing in social games. Zynga offered $2 billion to Rovio Entertainment Oy, the Finnish company that brought us the ever-addicting Angry Birds game. Rovio rejected the offer, and Zynga moved on to greener pastures in the mobile-game network.

4) Facebook rejects $1 billion offer from Yahoo! (2006)

In the early days of Facebook, Mark Zuckerberg confronted offers left and right. In 2005, Zuckerberg was in negotiations with MySpace CEO Chris DeWolfe about a Facebook buyout. When Zuckerberg insisted on an asking price of $75 million, DeWolfe balked. Early in 2006, Viacom offered Facebook $750 million; Zuckerberg raised his asking price to $2 billion, and Viacom snubbed the deal. Later that year, Yahoo! entered the picture and made an offer of $1 billion to Facebook. Yahoo! was quickly losing the interest of its younger demographic and saw Facebook as its last chance to catch the attention of wide-eyed youngsters. Zuckerberg eventually rejected the Yahoo! offer. Instead, Facebook made a deal with Microsoft to acquire the company’s Atlas Solutions, an ad-serving product Microsoft purchased in 2007.

5) Twitter rejects $500 million offer from Facebook (2008)

In 2008, Twitter’s popularity was on the rise, and Facebook quickly jumped at the chance to buy the company. Twitter rejected the offer for a couple of reasons. First, Facebook’s offer was an all-stock offer, and Twitter wanted cash. Twitter believed Facebook’s valuation was inflated, meaning the stock was far less valuable than Facebook claimed. Second, Twitter had high hopes for a secret revenue model that they hoped to launch in 2009. This month, Twitter finally went public. The company, which set its IPO pricing at $26 per share, saw its share price soar to $45.10 because of strong investor demand. The company received a valuation of over $24 billion.

6) Foursquare rejects $200 million offer from Yahoo! (2010)

In 2010, Foursquare was at the forefront of social networking and one of the first sites that existed entirely on a mobile platform. Both Facebook and Yahoo! offered Foursquare CEO Dennis Crowley buyout offers, but Crowley rejected both in favor of a higher asking price. As time passed, other geotagging apps sprang up – like Gowalla and Spindle – and sold for far less. One business analyst believes that Foursquare will fail by the end of this year and will be forced to sell for less than $50 million.

7) Friendster rejects $30 million offer from Google (2003)

Founded in 2002, Friendster fielded an offer from Google in 2003 for $30 million. Friendster was essentially the pioneer of social networking and expected to become a huge hit. Many advised Friendster to reject the offer and wait for internet stardom. That stardom never came. As other social networking sites like MySpace and Facebook flooded the market, Friendster went the other way and became an iconic case of failure. For young business entrepreneurs looking for investors, “Tell me why you have the next big thing” became “Tell me why you’re not the next Friendster.” MOL Global purchased the company for $26.4 million in 2009. If Friendster had accepted Google’s offer, that stock would have been worth at least $180 million.

8) Qwiki rejects $150 million offer from Google (2010)

In 2010, Qwiki won the editor’s choice at TechCrunch Disrupt. The mobile video app quickly caught the eye of Google, which offered to buy the startup for $150 million. Qwiki believed their company was worth a lot more and decided to hold out. Unfortunately, Vine launched and Qwiki floundered. Yahoo! later bought Qwiki for $50 million.

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iStock // Ekaterina Minaeva
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technology
Man Buys Two Metric Tons of LEGO Bricks; Sorts Them Via Machine Learning
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iStock // Ekaterina Minaeva

Jacques Mattheij made a small, but awesome, mistake. He went on eBay one evening and bid on a bunch of bulk LEGO brick auctions, then went to sleep. Upon waking, he discovered that he was the high bidder on many, and was now the proud owner of two tons of LEGO bricks. (This is about 4400 pounds.) He wrote, "[L]esson 1: if you win almost all bids you are bidding too high."

Mattheij had noticed that bulk, unsorted bricks sell for something like €10/kilogram, whereas sets are roughly €40/kg and rare parts go for up to €100/kg. Much of the value of the bricks is in their sorting. If he could reduce the entropy of these bins of unsorted bricks, he could make a tidy profit. While many people do this work by hand, the problem is enormous—just the kind of challenge for a computer. Mattheij writes:

There are 38000+ shapes and there are 100+ possible shades of color (you can roughly tell how old someone is by asking them what lego colors they remember from their youth).

In the following months, Mattheij built a proof-of-concept sorting system using, of course, LEGO. He broke the problem down into a series of sub-problems (including "feeding LEGO reliably from a hopper is surprisingly hard," one of those facts of nature that will stymie even the best system design). After tinkering with the prototype at length, he expanded the system to a surprisingly complex system of conveyer belts (powered by a home treadmill), various pieces of cabinetry, and "copious quantities of crazy glue."

Here's a video showing the current system running at low speed:

The key part of the system was running the bricks past a camera paired with a computer running a neural net-based image classifier. That allows the computer (when sufficiently trained on brick images) to recognize bricks and thus categorize them by color, shape, or other parameters. Remember that as bricks pass by, they can be in any orientation, can be dirty, can even be stuck to other pieces. So having a flexible software system is key to recognizing—in a fraction of a second—what a given brick is, in order to sort it out. When a match is found, a jet of compressed air pops the piece off the conveyer belt and into a waiting bin.

After much experimentation, Mattheij rewrote the software (several times in fact) to accomplish a variety of basic tasks. At its core, the system takes images from a webcam and feeds them to a neural network to do the classification. Of course, the neural net needs to be "trained" by showing it lots of images, and telling it what those images represent. Mattheij's breakthrough was allowing the machine to effectively train itself, with guidance: Running pieces through allows the system to take its own photos, make a guess, and build on that guess. As long as Mattheij corrects the incorrect guesses, he ends up with a decent (and self-reinforcing) corpus of training data. As the machine continues running, it can rack up more training, allowing it to recognize a broad variety of pieces on the fly.

Here's another video, focusing on how the pieces move on conveyer belts (running at slow speed so puny humans can follow). You can also see the air jets in action:

In an email interview, Mattheij told Mental Floss that the system currently sorts LEGO bricks into more than 50 categories. It can also be run in a color-sorting mode to bin the parts across 12 color groups. (Thus at present you'd likely do a two-pass sort on the bricks: once for shape, then a separate pass for color.) He continues to refine the system, with a focus on making its recognition abilities faster. At some point down the line, he plans to make the software portion open source. You're on your own as far as building conveyer belts, bins, and so forth.

Check out Mattheij's writeup in two parts for more information. It starts with an overview of the story, followed up with a deep dive on the software. He's also tweeting about the project (among other things). And if you look around a bit, you'll find bulk LEGO brick auctions online—it's definitely a thing!

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iStock
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Health
One Bite From This Tick Can Make You Allergic to Meat
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iStock

We like to believe that there’s no such thing as a bad organism, that every creature must have its place in the world. But ticks are really making that difficult. As if Lyme disease wasn't bad enough, scientists say some ticks carry a pathogen that causes a sudden and dangerous allergy to meat. Yes, meat.

The Lone Star tick (Amblyomma americanum) mostly looks like your average tick, with a tiny head and a big fat behind, except the adult female has a Texas-shaped spot on its back—thus the name.

Unlike other American ticks, the Lone Star feeds on humans at every stage of its life cycle. Even the larvae want our blood. You can’t get Lyme disease from the Lone Star tick, but you can get something even more mysterious: the inability to safely consume a bacon cheeseburger.

"The weird thing about [this reaction] is it can occur within three to 10 or 12 hours, so patients have no idea what prompted their allergic reactions," allergist Ronald Saff, of the Florida State University College of Medicine, told Business Insider.

What prompted them was STARI, or southern tick-associated rash illness. People with STARI may develop a circular rash like the one commonly seen in Lyme disease. They may feel achy, fatigued, and fevered. And their next meal could make them very, very sick.

Saff now sees at least one patient per week with STARI and a sensitivity to galactose-alpha-1, 3-galactose—more commonly known as alpha-gal—a sugar molecule found in mammal tissue like pork, beef, and lamb. Several hours after eating, patients’ immune systems overreact to alpha-gal, with symptoms ranging from an itchy rash to throat swelling.

Even worse, the more times a person is bitten, the more likely it becomes that they will develop this dangerous allergy.

The tick’s range currently covers the southern, eastern, and south-central U.S., but even that is changing. "We expect with warming temperatures, the tick is going to slowly make its way northward and westward and cause more problems than they're already causing," Saff said. We've already seen that occur with the deer ticks that cause Lyme disease, and 2017 is projected to be an especially bad year.

There’s so much we don’t understand about alpha-gal sensitivity. Scientists don’t know why it happens, how to treat it, or if it's permanent. All they can do is advise us to be vigilant and follow basic tick-avoidance practices.

[h/t Business Insider]

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