It seems like ages ago – it must have been the summer of 2014, a simpler time – when anonymous group messaging service Yik Yak was a pretty big deal, because it was popular on college campuses, holding out the promise a big millennial audience would power it to become the “next Facebook.”
Well, it turns out not really.
This week digital payments platform Square Inc. bought Yik Yak’s entire engineering team, paying under $3 million for a group of less than ten personnel.
The deal comes on top of steep cuts last December, when Yik Yak laid off thirty out of fifty employees, meaning it is now down to under 20 employees.
Yik Yak co-founder and CEO Tyler Droll will not be joining Square – the sort of detail which, reading between the lines, would seem to call into question the continued existence of Yik Yak (it’s never good when you have to explicitly state that the founder isn’t bailing).
Founded in 2013, Yik Yak enabled groups of people to engage in anonymous chats defined by specific geographic locations, which made it perfect for the gossipy, hormonal swamp that is American higher education.
The number of monthly active users quadrupled from around 900,000 in September 2014 to 3.6 million at the end of that year, while the company received investments of $73.5 million, with the last round, led by Sequoia Capital, valuing it at around $400 million.
But almost from the beginning Yik Yak was dogged by complaints of cyber-bullying, hate speech, and trolls, as the usual social media dregs were emboldened by anonymity (although many of these trends simply foreshadowed similar problems on other social networks with less anonymity, including Facebook and Twitter).
In 2015, various women’s advocacy groups filed a complaint with the U.S. Department of Education about sexual harassment on Yik Yak, and a number of colleges tried to ban it with mixed success.
However the racy reputation helped deter advertisers from working with the service, which never came up with an effective model for monetization.
In January 2016, it began requiring users to adopt handles to identify themselves, which alienated users who feared they were no longer truly anonymous, but reversed that decision in November.By mid-2016 the number of active monthly users slipped to 1.8 million, far short of the scale needed to attract big ad bucks, and it faced growing competition from new messaging services like Snapchat, which has replicated popular features like group chat.
The company has also been bleeding personnel since late 2015, including the departure of chief technology officer Tom Chernetsky in April 2016. Following the major cuts last December, amounting to two-thirds of the company’s total head counts, rumors swirled earlier this month that Sequoia was looking to sell its stake in Yik Yak.