I guess it has something to do with IP. The way I understood it was that the company Summly licenced the summarisation algorithm was selling it to Yahoo!, but they couldn't do that because Summly was using it, too. So, to get them out of the way, Yahoo! bought them and shut them down.

Disclaimer: This is just the way I understood it, I might be partially or completely wrong.

That doesn't make much sense - as far as I understand, so far as the US, you cannot patent or hold a license over an algorithm, only an implementation thereof.

Yes, but if the algorithm is a trade secret and you're licensing it out with terms of use that aren't favorable to you, you may determine that its in your best interest to buy the company rather than get sued for breach of the licensing contract depending on how much cash you're anticipating to lose through that litigation.

That's my gist as well, but for an article with such a bold title, it doesn't really say much.

It was insider dealing involving a minor who's family has very powerful connections.