Perhaps the biggest dream of a startup founder (after becoming the next Google or Facebook, of course) is cashing and having their company bought out by a larger corporation. And quite a few mobile app startup founders have realized their dream fairly recently, with mobile being quite possibly the fastest growing segments of the digital sphere.
Some of the latest significant acquisitions in terms of both price tag and potential future growth are mobile apps, services, and games – and the companies that create them. Plenty of upstart companies with creative ideas and tons of talent were either acquired and their users, technologies and employees were folded into the new parent company (or an “acqui-hire”), while others apps stayed in business as usual, just with more resources at their disposal.
At the top of the list is Facebook buying the real-time, cross platform mobile messaging platform WhatsApp for a cool $19 billion. Facebook plans to keep the service independent (at least for now) – and the company has announced the reasons behind the acquisition include not only WhatsApp’s massive user base (450 million users around the globe and counting), but the loyalty of its users (70% use it every day). In addition, WhatsApp will give Facebook a deeper reach into Europe and other emerging markets around the world.
Instagram being purchased by Facebook for a remarkable $1 billion is perhaps the second most significant recent buy – and another purchase with a major price tag. Unsurprisingly, Instagram itself remains fully operational – and notably, continues to connect with social networks that directly compete with Facebook, such as Twitter.
Facebook also bought speech translation application Jibbigo and acqui-hired the company that created it, Pittsburgh-based Mobile Technologies, for an undisclosed sum. The app itself will remain available to users.
Yahoo has also busy buying mobile producers recently. They recently snapped up Ptch (the mobile video startup powered by the team behind DreamWorks Animation) for a cool $6.5 million – although they shut down the app itself, the skills of the team and the technology they built will likely be used in other Yahoo services.
In addition, Yahoo picked up social diary app Wander (and changed the name to Days)for a rumored $10 million, and Aviate – the intelligent homescreen Android app launcher – for $80 million. Fortunately for fans of Aviate, the app won’t be shut down – in fact, the team behind promises that it will only get better.
Information-gathering startup Summly was also purchased by Yahoo for $30 million, and members of the team (including then-17 year old founder Nick D’Alosio) will be joining Yahoo as well – and unfortunately for users, the app itself will close.
And of course, Google has done their fair share of purchasing as well. The search engine company spent $60 million on Bump, the app that allowed users to share contact info and more by physically bumping smartphones. While they shut down the app itself, rumors are that the technology behind it will appear on other Google services.
Google also spent just shy of a billion ($966 million) on Waze, the Israel-based mapping startup, which is still available in the Android store despite talk of a shutdown. The new app adds plenty of social engaging features that Google Maps doesn’t currently have; also by purchasing Waze themselves, Google is keeping it away from their rivals, which is yet another reason a company may make an acquisition – so their competition can’t have it themselves.
Searching through all the available mobile apps has become a difficult chore in and of itself – and accordingly, Apple picked up Chomp for an undisclosed amount, a search tool for apps that used to help users sift through the thousands of apps available in the company’s App Store. While the company has removed the Chomp app from its store and discontinued the service, as in many other acquisitions, the tools that were part of Chomp will likely be used under the Apple brand umbrella itself.
That just covers the major players. OpenTable spent $10 million on the visually-focused foodie app FoodSpotting, and social game creator Zynga recently paid $53 million for Words with Friends mobile game producer NewToy as well as $200 million for OMGPOP, the firm behind the Draw Something app. What’s more, Zynga picked up the U.K. based gaming company (and the maker of Clumsy Ninja, amongst other popular titles) Natural Motion for $527 million, signaling a new period of growth for the company overall.
On the more practical side, LinkedIn also added to its value as the premier B2B networking site with their purchase of Pulse for $90 million, while DropBox acquired the popular email management system Mailbox for approximately $100 million. Both apps have been folded into their services of their respective buyers.
From the non-digital realm, MasterCard recently acquired C-SAM, a digital wallet maker that is also the transactions provider that built ISIS, a NFC (near field communications) payments service. The financial side of the deal has yet to be disclosed, but the new technology will help power the credit company’s MasterPass, an in-app method of payment.
Surprisingly, Twitter has been fairly quiet on the mobile app acquisition front. However, the social networking company tends to build its technology in-house, most notably Vine, Medium, and Jelly. That said, Twitter did buy mobile ad exchange startup MoPub for $350 million in stock, a purchase that would allow the social networking company manage the ad inventory across its various mobile platforms and offer advertisers new, more accurate real time options.
Based on all this recent purchasing activity, it is pretty clear that mobile app acquisitions will continue to grow throughout 2014 and beyond. While the justifications behind a major acquisition like these are numerous and complex, it may all come down to the basic concept of resources. If an existing app has the user base and the technology that users want (as well as the talent behind it), a large company such as Yahoo or Linked might choose to skip building a competing version in-house – and instead simply purchase it outright.
Photo Credit: Carsten Schertzer
Get the latest from the Blue Label Labs’ blog in your inbox
More in Development
How to Setup SSH Tunneling to Access AWS EC2 and RDS Resources Using PuTTY
Accessing AWS resources, such as a Linux EC2 machine or a PostgreSQL…
App Marketing Tools That Can Help You Grow Your Business
The idea behind most software releases is to garner as many users…
How Pet Tech Can Follow in the Footsteps of Home IoT
Our pets bring substantial joy to our lives which is why we…