Seventeen-year-old Nick D'Aloisio is taking some time off from school in London, where he lives with his parents. He will let mom and dad help manage his money.
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Close Getty ImagesSummly founder Nick D'Aloisio last year at a conference in Munich.
Those are the decisions of a newly minted teenage millionaire.
Mr. D'Aloisio has sold the free newsreader app he began developing at age 15 to Yahoo Inc., which announced on Monday it bought Summly without disclosing a price. A person familiar with the situation said Yahoo paid tens of millions of dollars for the company.
Not bad for a team that will bring just two other employees to Yahoo and generates no revenue.
Plenty of teenage entrepreneurs have built companies that later have success, but very few strike it rich so quickly.
Yahoo was attracted to Summly's core technology for automatically summarizing news articles. The technology, which included an algorithm for deriving the summaries, was created with help from SRI International, a Silicon Valley research-and development firm that has an artificial-intelligence lab and has an ownership stake in the startup.
Behind the app was Mr. D'Aloisio, who taught himself how to create computer programs at age 12, and previously created several apps, including Facemood, which analyzed a person's Facebook account to determine their mood, and a service that helps people discover new music.
In 2011, Mr. D'Aloisio founded his company, at the time called Trimit. He redesigned the app to automatically boil news articles down to 400-word summaries and re-launched it as Summly in late 2012 with help from SRI.
To help with the launch, Mr. D'Aloisio raised funding from Zynga Inc. CEO Mark Pincus and the investment firm owned by Hong Kong business mogul Li Ka-shing, who Mr. D'Aloisio said "contacted me out of the blue" after Trimit began to receive accolades.
That opened the door to other high-profile investors, who collectively gave him a total of $1.5 million in funding, including actors Ashton Kutcher and Stephen Fry. Besides its effectiveness in summarizing content, Summly has drawn attention for its slick design. The colorful app's menu features different types of news content that are refreshed by swiping them to the side.
Mr. D'Aloisio became a minor tech celebrity, and his efforts garnered numerous print-media articles and TV appearances.
"It's been an amazing journey," he said of the past few months. "I didn't expect this to happen after launching [Summly] in November."
Mr. D'Aloisio, who lives with his parents and younger brother near the southwest London suburb of Wimbledon, said he will stay at home for the time being and remain on a kind of sabbatical from King's College School while continuing to take some "exams outside of school" in order to prepare for eventual university enrollment. He said he is planning to study humanities rather than computer science.
Mr. D'Aloisio said his parents are Australian and that he spent ages one to seven there before returning to the U.K., where his father works as an analyst for a commodities division of Morgan Stanley . His mother is a lawyer.
He said he doesn't have any special plans for the funds he will earn from the acquisition other than to work with his parents to manage it.
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He also said it would be "reasonable" to spend a few years at Yahoo but added that "I have no limits on time. I want to go in with open eyes and try to innovate."
Last fall, when Mr. D'Aloisio was seeking financing, he said "a number of companies approached us" about a possible acquisition. Mr. D'Aloisio was attracted to Yahoo because of its "scale" and Chief Executive Marissa Mayer's "real focus to beautify content when you're on a mobile device."
The deal is at least the sixth startup acquisition since Ms. Mayer became Yahoo's CEO last year. Yahoo said it is shutting down the Summly app, which was downloaded less than one million times, and incorporating its technology into other Yahoo services.
Adam Cahan, a Yahoo senior vice president, said in an interview on Monday that Mr. D'Aloisio was an "exceptional" talent and that Yahoo did "extensive" testing of Summly's algorithm, or mathematical formula, for condensing news articles.
Mr. D'Aloisio has met with a number of Valley luminaries, including Apple's senior vice president of industrial design Jonathan Ive, according to people familiar with the conservations.
Other investors in Summly, Mr. D'Aloisio said, include Wendi Murdoch, wife of Rupert Murdoch, the chief executive and chairman of Wall Street Journal owner News Corp., which signed a deal with the startup so that its content could easily be integrated with the app.
Ms. Mayer has said the company is looking to create services for mobile devices that fit into people's "daily habits." She said she is focused on increasing the amount of time people spend on Yahoo, which in time will lead to greater revenue.
The company also is in talks to buy a controlling stake in France T�l�com SA's online-video site Dailymotion, which is valued at around $300 million, according to people familiar with the talks. If the deal materializes, it would be Ms. Mayer's first major acquisition since taking over the Internet pioneer last year.
Yahoo, which generates the bulk of its $5 billion in annual revenue from selling ad space on its websites and apps, also has been examining numerous advertising-technology firms that it could snap up, people familiar with the matter have said.
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The move by Yahoo into news-reading technology for mobile devices comes less than a year after the company shut down its Livestand app, which it created in 2011 to compete with companies such as Flipboard Inc. and Alphonso Labs Inc., the maker of the Pulse app.
"There is a consumer behavior around reading and finding information and articles on mobile devices, and lots of people have innovated in this space," Mr. Cahan said.
—Ben Rooney and Jessica E. Lessin contributed to this article.Write to Amir Efrati at amir.efrati@wsj.com
Corrections & Amplifications Yahoo Chief Executive Marissa Mayer is a woman. A previous version of this article referred to her as Mr. Mayer in one instance.
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