Google Is Buying Connected Device Company Nest For $3.2B In Cash


Google is acquiring connected device company Nest for $3.2 billion. Google sent out an email to employees noting the acquisition today and later issued a press release.

In the release, Google noted that Nest has been offering its best-selling thermostat since 2011 and recently began offering the Protect smoke alarm, which networks with its other devices.

Nest Founders Tony Fadell and Matt Rogers will both join Google. Rogers was one of the first engineers on the iPhone team at Apple.

“They’re already delivering amazing products you can buy right now–thermostats that save energy and smoke/CO alarms that can help keep your family safe,” said Google CEO Larry Page in a statement. “We are excited to bring great experiences to more homes in more countries and fulfill their dreams!”

Fadell, who is known as the ‘father of the iPod’, said that they’re ‘thrilled to join Google.’ “With their support, Nest will be even better placed to build simple, thoughtful devices that make life easier at home, and that have a positive impact on the world.”

Nest will continue on as its ‘own brand identity’ and continue to be led by Fadell. The deal hasn’t closed yet as it has to meet regulatory approval.

Nest founders Fadell and Rogers also sent an emailed statement to TechCrunch about why Nest chose to go ahead with the acquisition.

“Google will help us fully realize our vision of the conscious home and allow us to change the world faster than we ever could if we continued to go it alone. We’ve had great momentum, but this is a rocket ship,” Fadell says. “Google has the business resources, global scale and platform reach to accelerate Nest growth across hardware, software and services for the home globally. And our company visions are well aligned – we both believe in letting technology do the hard work behind the scenes so people can get on with the things that matter in life. Google is committed to helping Nest make a difference and together, we can help save more energy and keep people safe in their homes.”

Fadell says that this decision was not made hastily. He says that at the 2011 TED conference — even before Nest had launched — he and Nest VP of business Erik Charlton had ‘huddled’ together in a corner with Google’s Brin to show him a video and early model of the Nest thermostat.

He instantly got what we were doing and so did the rest of the Google team when we showed them. In May 2011, Google Ventures led our Series B round of financing, and in 2012, Series C. Time and time again, Googlers have shown themselves to be incredibly like-minded, supportive and as big of dreamers as we are. I know that joining Google will be an easy transition because we’re partnering with a company that gets what we do and who we are at Nest – and wants us to stay that way.

We’ve been hearing rumors about Nest getting courted with large billion-dollar acquisition offers for months now, but a Google buy is a definite statement. The company has been fairly serious about its connected device efforts for a while but hasn’t quite been able to get anything to gel. For instance, there have been some abortive attempts at connected devices like Android at Home in the past. But Nest already has a nice start in producing well-designed and connected home devices — something that Google should be able to build off of in the future.

Peter Nieh, a partner at Nest investor Lightspeed Venture Partners, has a post up about his early days working with Fadell at startup General Magic and what Nest has done since. He also shared a photo of the pair from 1992:


Nieh says that though he was excited to work with Fadell again when it came time to invest in Nest, “…our excitement went off the charts when we met Matt Rogers, Tony’s co-founder, who was responsible at Apple for iPod software development and one of the first engineers on the original iPhone team.  We would have invested had they been looking to start a food truck.”

We reached out to Nieh for more thoughts, and he told TechCrunch that “Nest is a very special company — it’s a combination of an incredible team led by Tony and Matt, world-changing vision, and world-class execution.

“The acquisition by Google is just a milestone along the way as they continue their quest to change the world,” he added. “I can’t wait to see how they will continue to bring magic to all those unloved things in our homes.”

Google has previously been rumored to be investigating ramping up its own smart thermostat efforts, but this would likely supplant that — or the Nest team would take those projects over. Google also has an interesting project called PowerMeter which monitors power consumption over time which could have some cool applications here.

The acquisition could also provide a patent boost of some sort for Google. In December, Nest said that it had 100 patents granted, with 200 more on file with the U.S. Patent Office and another 200 ready to file. Nest has been the target of some fairly high-profile patent suits and threats from legacy manufacturers like Honeywell over its thermostat and BRK over its Protect smoke detector. Google will likely offer shelter from further suits with its wide range of patents across a variety of technology arenas.

As far as how much autonomy Fadell will have to execute on his vision of what Nest can be, it doesn’t make a lot of sense for Google to derail a business that — by most counts — was fairly successful already. And had been garnering praise from consumers over design. It could help with infrastructure problems that have cause failed firmware upgrades which resulted in complaints recently.

There’s also bound to be an immediate and visceral reaction to the access that Google will now have to information about when you’re home, which rooms you’re in and more. Which is why Nest also issued a Q&A about what will happen to users now that Google owns their thermostats and smoke detectors:

Will Nest continue to support iOS so I can have the Nest app on my iPhone or iPad?

Yes, absolutely. We’ll continue supporting iOS, Android and modern web browsers so you can check in on your home and control the temperature from wherever you are.

Will Nest and Google products work with each other?

Nest’s product line obviously caught the attention of Google and I’m betting that there’s a lot of cool stuff we could do together, but nothing to share today.

What will happen to the Nest warranties on products?

No change there – we stand behind our products like we always have.

Will I still be able to find Nest products at my local retailer?

You bet. We intend to continue selling through the same partners in the US, Canada and the UK.

Will Nest customer data be shared with Google?

Our privacy policy clearly limits the use of customer information to providing and improving Nest’s products and services. We’ve always taken privacy seriously and this will not change.

That answer is a bit vague, but the concerns over the recent revelations of enormous data gathering efforts on the part of the NSA should definitely cause some to worry. Whether or not Google chooses to share information voluntarily, it’s still a big target for those looking to hoover up vast swaths of data about its users, and that will only be more likely as time goes on, not less.

Swapbox Lands $800K To Take On Google’s BufferBox And Amazon’s Lockers


San Francisco-based startup and Y Combinator Winter 2013 class member Swapbox has raised $800,000 in seed funding, led by Tony Hsieh’s Vegas Tech Fund investment vehicle and including Fuel Capital, YC founder Trevor Blackwell, Base Ventures and Ace & Company. The startup is hoping to cash in on the rise of ecommerce and home delivery, with shared, centrally located delivery lockers so people never miss a package again.

Swapbox isn’t alone with that aim, and it’s pitting itself against some heavy hitters; both Google and Amazon already have delivery pick-up initiatives in place, Amazon via its Lockers programs in select cities, and Google through BufferBox, a Waterloo-based startup it acquired last year. BufferBox recently went live in San Francisco, where it has packages accepted by local businesses. Swapbox co-founder and CEO Neel Murthy thinks there’s still room for a startup in the space, however.

“We accept any packages from anywhere. Shop online, we give you a new address and you just ship to that address,” he said in an interview. “It’s an independent platform that works for all the other ecommerce players.”

The service is piloting in SF, where it has 15 locations currently. Each consists of heavily modified gym lockers located at businesses around the city, and Murthy says they’ve paid special attention to industrial design with their physical hardware, in order to help with branding. The plan is to expand to surrounding areas near SF within the next year, and then look further afield soon after. Swapbox has different arrangements with its location partners, but most involve some kind of rev share of the service fee paid for by its users.

The business as it stands looks like a prime target for some other online retailer hoping to keep up with Amazon and Google to gobble up, but Murthy says they’ve built Swapbox as a long-term play. There’s plenty they’re planning to add later on, and the intent is to hopefully move the burden of cost from the consumer to the ecommerce players once they get enough scale. There’s also a plan to use Swapbox’s capabilities to essentially build in a type of escro for small merchants and private sale deals, Murthy says.

That would work by allowing sellers, on Craigslist for example, to use the Swapbox locations to exchange goods, with a seller controlling access for a buyer based on when payment clears. It takes out any of the uncertainty around meeting a total stranger online with a wad of cash or expensive gadget in their pocket. The escrow play could extend beyond just the private exchange scenario in theory, too.

Swapbox chose its investors mostly for their value as strategic partners, according to Murthy, and Zappos founder Tony Hsieh is a very strategic one indeed for a company this tied to online commerce. Google and Amazon may have a head start on automated delivery, but there’s definitely room for an open platform to serve everyone else, and Swapbox could be the one to step up in that role.

Google Acquires Android Performance Startup FlexyCore For A Reported $23 Million


Google has acquired the French startup FlexyCore, which is best known for its Android performance boosting solution DroidBooster. Terms of the deal remain undisclosed, although France’s L’Expansion, which first reported the acquisition, has pegged the price at $23 million.

Google has confirmed the purchase, citing FlexyCore’s strong team and “expertise in building software to optimize Android device performance”. In fact, the startup’s team has already been integrated with Google’s Android team, while the acquisition has been a year in the making, having started last September and been concluded earlier this month, apparently. That’s quite a protracted acquisition, even by the slowest of European standards, and especially for what looks in-part like an acqui-hire.

Five year-old FlexyCore’s main product, DroidBooster, is designed to boost the performance of Android devices, in terms of speed and battery life – both of which are crucial to the competitiveness of any modern-day smartphone platform as device makers compete in the performance arms race associated with our always-on digital lives. It claims to be able to boost the performance of ARM-based devices by up to ten times, and does this by improving the performance of an Android handset at build-time by “generating highly optimized ARM binary from Dalvik code”.

The technology was being targeted by FlexyCore at both high and low end devices, citing handset makers’ ability to introduce new Android features or extend existing ones. It was also being pitched as a way to bring “high end performance to low end devices”, enabling Android to “break into the mass market”, which of course it has since done. However, an essential growth market for Google’s OS is emerging markets, and anything that can push high end performance to ever lower price points is bound to ring the cash registers at Mountain View.

FlexyCore was originally supported by french state-backed incubator Emergys, and has raised 1.5 million Euros from Paris-based VC Sochrastem, so if L’Expansion’s $23 million price is on the nail, this looks like a pretty decent exit for a French company, presuming all previous funding was disclosed, and including any earn-outs.

Google, SAP, Cisco & Samsung Among Potential Tech Buyers For Some Or All Of BlackBerry, Says Reuters


Google, SAP and Cisco are among a number of technology companies interested in buying up portions — or all — of BlackBerry’s business, according to Reuters, which cites several sources close to the matter. BlackBerry has also apparently asked for preliminary expressions from Intel, LG and Samsung, by early next week. Portions of the business of most interest to potential technology buyers are BlackBerry’s secure server network and patent portfolio, according to the sources.

None of the companies named by Reuters provided comment on its report.

Other tech companies, including Microsoft, Huawei and Lenovo, are notably absent from the list of prospective buyers. Redmond unsurprisingly so; despite being previously linked with a possible BlackBerry bid, Microsoft is now tied up with its own $7.2 billion bid for Nokia’s Devices & Services business. Meanwhile Chinese telco Huawei has faced difficulties in the North American market over national security concerns about links to the Chinese military — likely making a bid for a company that supplies phones to government officials a difficult sell.

An enterprise-focused bidder — such as SAP or Cisco — might make the best fit for BlackBerry’s security-focused messaging handset business at this point, with the consumer smartphone marketplace now primarily centred on Android and iOS. That said, the BYOD trend has been steadily eroding BlackBerry’s enterprise reach, so even here its appeal is increasingly niche.  (Albeit, it does have its own mobile device management software that seeks to tap the BYOD trend, with the ability to manage iPhones, Android-powered devices and BlackBerrys).

Late last month, days before BlackBerry reported a $965 million quarterly loss (due mostly to a writedown on unsold Z10 devices), it signed a letter of intent to go private. Its largest shareholder, Fairfax Financial Holdings, is the prospective buyer, tabling a $4.7 billion bid for the company.

Going private also opens up the possibility that a new owner might look to break up the company and sell off its constituent parts, although Fairfax claims it has no plans to do so. But, according to Reuters, BlackBerry is actively shopping itself around to potential strategic buyers anyway — as an alternative to the Fairfax deal. That deal, which values the company at $9 per share, has faced some skepticism from financial analysts — who believe a $7 per share price is more realistic — which may explain why BlackBerry is apparently looking elsewhere now.

Technology buyers are not the only potential bidders for the BlackBerry pie, with private-equity firms also asking the company to provide additional financial details about its various business segments, according to two of Reuters’ sources. However they said BlackBerry is currently focused on taking bids from industry peers.

Despite Google et al apparently agreeing to talk, it’s unclear how much serious interest there is in buying BlackBerry or which, if any, parties will bid. Potential bidders are apparently proceeding with caution, given the level of uncertainty around BlackBerry’s business and questions over the future value of its business assets.

Google’s interest is likely to be in BlackBerry’s patent portfolio. Android has faced renewed legal attacks in recent weeks, with Nokia’s lawyers scoring a preliminary win against HTC‘s Android-powered One flagship device in the U.S. last week. Google’s 2011 acquisition of Motorola was also widely touted as a patent-focused purchase aimed at bolstering Android’s IP defences. So it’s due diligence for Mountain View to at least take a closer look at BlackBerry’s patents. Samsung may also be eyeing those.

However, Reuters notes that the value of BlackBerry’s patent portfolio and licensing agreements is diminishing rapidly — likely to halve over the next 18 months. Which may temper any interest there.

BlackBerry’s patents are estimated to be worth between $2 billion and $3 billion, and its security-focused messaging system services business is likely worth $3 billion to $4.5 billion. The company also has $3.1 billion in cash and investments — however with revenues sliding and more loss-making quarters looming, that cash is going to get eaten up pretty quickly. Reuters cites Bernstein analyst Pierre Ferragu’s prediction that the company will burn through almost $2 billion over the next year and a half.

Meanwhile, BlackBerry’s long-touted plan to extend the reach of its consumer mobile messaging service, BBM, to Android and iOS – perhaps with the hope of creating another business asset it could shop around to buyers – has stalled.

BBM was initially slated to launch on the new platforms globally late last month but the rollout was halted after a leaked version of the Android .apk overloaded its servers. The company has since said it remains committed to launching BBM on Android and iOS but given no new timeframe for when this will happen. In the event, it may be that BlackBerry’s bits get broken up and sold off before BBM is able to make the leap onto other platforms.

Google Acquires YC-Backed Flutter, A Gesture Recognition Technology Startup, For Around $40M

Screen Shot 2013-10-03 at 00.05.15

Google’s Glass, Android and other products may soon be picking up more Kinect-style gesture features: the company has bought Flutter, a Y Combinator-backed startup that focuses on gesture recognition technology. Its first and only product — an app that provides gesture detection and recognition from standard webcam devices — will remain live and operational, the company says.

Terms of the deal were not disclosed but we have heard that the price was around $40 million.

Flutter confirmed the news on its site, where it said it will continue to offer its app — it currently has a Mac app — while it also works on research at Google. “We are thrilled to announce that we will be continuing our research at Google. We share Google’s passion for 10x thinking, and we’re excited to add their rocket fuel to our journey,” Navneet Dalal, one of the co-founders, writes. (Nice gaming reference, Navneet!) The full note follows below.

That Mac app (which, btw, added Chrome support in February) clearly struck a chord, with downloads in more than 90 countries, reaching the top-five apps in the Mac App Store in its first two weeks of launch in some 30 of those, and number 1 in 14. It had around 1 million users on desktop.

Flutter had been planning to launch a new product in August, we understand, but that plan abruptly got delayed. Today’s news gives us a clue why. What was that product? Likely a Windows version, which was already in private alpha; or an enhanced Mac version with more features — which was also in the works, as Dalal and his co-founder Mehul Nariyawala noted to Colleen last year.

Flutter was in the YC winter class of 2012, and had raised $1.4 million in seed funding from Andreessen Horowitz,NEA, and Spring Ventures, along with Start Fund and a handful of individual angel investors.

Gesture technology is a big area these days, with services such as those from Microsoft and the Kinect, along with other products like the Leap Motion sensor bringing the concept into the mainstream. Others that are also investing further in gesture technology include Intel’s acquisition of Omek. Apple, meanwhile, has yet to make a move here but there have been rumors that it will, too.

It’s unclear if Google will keep Flutter working on standalone apps, or whether the technology will get integrated further into its own software and hardware. For now, a Google spokesperson had this to say:

“We’re really impressed by the Flutter team’s ability to design new technology based on cutting-edge research. We look forward to supporting and collaborating on their research efforts at Google.”

Here’s the full note from Flutter announcing the sale and a video of Flutter from its launch:

When we started three years ago, our dream to build a ubiquitous and power-efficient gesture recognition technology was considered by many as just “a dream”, not a real possibility. Since then, we have strived to build the best machine vision algorithms and a delightful user experience.

Even after we launched our first app, we didn’t stop our research; your enthusiasm and support pushed us to continue to do better. We’re inspired everyday when we hear, for example, that Flutter makes you feel like a superhero — because any sufficiently advanced technology should be indistinguishable from magic, right?

Today, we are thrilled to announce that we will be continuing our research at Google. We share Google’s passion for 10x thinking, and we’re excited to add their rocket fuel to our journey.

We’d like to extend a special thank you to all of our users; your feedback and evangelism inspire us every day. Flutter users will be able to continue to use the app, and stay tuned for future updates.

Bump Mobile Contact Sharing App Acquired By Google, Will Stay Alive For Now


After raising nearly $20 million and becoming one of the most downloaded mobile apps but failing to find real revenue, Bump Technologies has been acquired by Google. Its namesake app Bump lets you physically tap phones together to share contact info and more, and it will stay open for download. Congratulations might not be the right word, but Bump could have a bright future at the Googleplex.

Bump’s David Lieb writes “We strive to create experiences that feel like magic, enabled behind the scene with innovations in math, data processing, and algorithms. So we couldn’t be more thrilled to join Google.” It appears that the whole 25-person team including Lieb and fellow co-founder Andy Huibers will be coming aboard at the search giant.

Bump and the collaborative photo sharing app called Flock it released last year “will continue to work as they always have for now; stay tuned for future updates.” The blog post doesn’t mention what will happen to the Bump Pay app the startup built on top of PayPal that lets users make peer-to-peer mobile payments by knocking fists.

Terms of the acquisition weren’t disclosed, so it’s hard to tell exactly how strong of an exit this was for Bump and its investors, which include Y Combinator, Sequoia Captial, Felicis Ventures, SV Angel, Andreessen Horowitz, and many angels.

[Update: Sources familiar with the deal say the acquisition was definitely not a home run for Bump, but that it was no acquihire either as we suspected. They didn't specify an exact sale price but pegged the deal in the ballpark of $35 million. That would be modest premium on Bump's $19.9 million in funding but not a glowing multiple VC would want to brag to their LPs about.]

Bump gained huge popularity by being an early App Store hit. Instead of having to clumsily type out a new friend or professional colleague’s contact information, you and someone else could both open Bump, bump fists together while holding your phones, and the contact info, photos, audio, video, or other selected files would be shared between you instantly. As of March it had hit 1 billion photos shared and 125 million downloads, up from 100 million in August.

With time, though, other ways to quickly share contact information emerged. Meanwhile, Bump remained free and wasn’t earning any meaningful revenue so paying its strong mobile engineering team may have burned through the $16.5 million round led by Andreessen that the startup raised in November 2011.

Then Apple dropped a bomb on Bump. It announced a new feature called AirDrop for iOS 7 that would make sharing files between nearby phone a native feature. That could have curtailed Bump’s steady growth. It was time for Bump to throw in the towel.

Based on these factors, the acquisition may have been more lucrative than a basic acquihire, but not big enough to be considered a home run.

From one perspective, the sale might be considered a failure. Bump could have minted if it found a way to monetize its huge user base, but couldn’t find a way to go it alone and so instead folded into a tech giant. From a different perspective, Bump’s soft landing could be said to have kept investors from losing money while giving its team an opportunity for greater impact thanks to Google’s resources.

What may have interested Google actually isn’t Bump itself, but Flock. The app uses geolocation to determine which of your Facebook friends you’re nearby, and then offers to create a collaborative photo album with them that includes all the shots any of you took at that party, concert, or day in the park. The idea is that your friends might not broadcast all those photos to social media, but you’d still want to see them as you all shared the experience together. The Flock design philosophy was to strip as much out of the photo sharing process as possible to make it seem almost automatic.

Google might look to turn Flock into a part of Google+ as a way to simultaneously compete with Facebook’s photo sharing and Dropbox’s photo saving services. Google+’s Party Mode was a pioneer in collaborative photo sharing centered around events, but the late-comer social network has still failed to gain serious engagement. Facebook recently launched shared albums, making it more dire for Google to get deeper into the space.

The acquisition also scores Google a trove of mobile communication patents that it could use to help nearby devices sync up. These include an app noticing that sensors on two devices share similar readings to determine that they’re in proximity. Google could use these patents to improve Android and create richer alternatives to near-field communication (NFC).

With Bump and Flock’s features combined with Google’s built in-audience, the ideals of “irreducible” design the startup embodied could make a bigger impact without having to generate revenue directly.

Google Confirms It Has Acquired Android Smartwatch Maker WIMM Labs

WIMM smartwatch

Google has confirmed it acquired WIMM Labs last year, a company that previously made an Android-powered smartwatch before shuttering operations in 2012. At the time a message on its website said it had entered into an exclusive partnership without releasing further details, but it’s now clear that partner was Google, rather than Apple as some had initially speculated. Google’s WIMM Labs acquisition was reported earlier by Gigaom.

Google is rumoured to be developing a smartwatch of its own, with patents turning up earlier this year (filed in 2011), and a report by the FT that claimed Google’s Android team was in the process of developing such a device. Google has also hinted at Android powering a range of wearable devices in the past, when CEO Larry Page let slip during a quarterly earnings call this year that Glass runs on its smartphone and tablet OS, and that Android is “pretty transportable across devices”. Google has also long had bigger ambitions for Android than just pushing it onto phones and tablets, with TV set-top boxes, in-car tech, home automation and wearables all areas where it’s actively encouraging Android to spread.

WIMM Labs started out building Android-based platforms for wearable displays, akin to Google Glass, and then created the WIMM One in 2011: a smartwatch powered by Android 2.1 that was aimed at developers as a sort of concept flagship ahead of a broader consumer launch. The WIMM One used Bluetooth and Wi-Fi 802.11b/g for connectivity, had 256 MB of RAM plus a 667MHz processor, and used a screen design that refreshed once per minute to conserve battery life. It also supported apps via a “Micro App Store” — installed and managed by users via a web-based dashboard. Android developers were offered custom APIs for adapting their software to the WIMM One’s tiny, 16-bit colour screen.

Google is not commenting further on the acquisition at this point, beyond providing confirmation that it picked up WIMM Labs in 2012. If Mountain View is building its own smartwatch it’s unlikely to beat its Android OEM partner Samsung to a launch, as the Korean company’s Galaxy Gear device is probably going to be unboxed next week in Berlin at a September 4 event. Plenty of other Android-powered smartwatches are also entering the frame via crowdfunding sites like Kickstarter, and also cropping up on the roadmaps of other Android OEMs. Meanwhile Apple’s rumoured iWatch remains elusive.

If Google isn’t building its own smartwatch hardware, acquiring WIMM Labs could be a way to help it develop a custom version of Android designed for wrist-mounted wearables, which it could then provide to OEMs the same way it currently does with Android proper. Given the amount of interest in smartwatches from OEMs big and small, that could be the better strategy for long-term platform growth.

Yahoo And Google Are Both Spending Big Money On Acquisition Sprees And What That Says About Their Futures


These days it seems as if a startup so much as glances in Marissa Mayer’s direction, it can expect a bid within 24 hours. There’s been a lot of buzz about Yahoo’s new role as an acquisition hound of late, and Mayer’s attempts to turn the beleaguered giant into a mobile-first company and energize its ranks with young, acqui-hired talent.

But Yahoo isn’t alone in its pursuit of “serial acquirer” status. Highlighted by its blockbuster acquisition of Waze last month, Google has quietly snapped up a cadre of companies as well — and has spent a pretty penny doing it. In its “10-Q” filing with the SEC on Thursday, Google revealed that it spent $1.3 billion on acquisitions during the first half of 2013, with $966 million of that total going to Waze.

While reports had varied on the final purchase price, according to the filing, the acquisition of Waze was “for a total cash consideration of $966 million,” with “$847 million attributed to goodwill and $188 million attributed to intangible assets,” minus the $69 million in other net liabilities assumed from Waze’s books. Though the final number is subject to change, it’s now abundantly clear just how hungry Google was to beef up its social mapping data and prevent it from falling into the hands of its competitors.

On top of its new social mapping prize, Google has made another 15 acquisitions so far this year, shelling out $344 million in additional assets to buy companies like Wavii, Makani Power, Channel Intelligence and DNNresearch. Channel Intelligence represented the largest deal of the batch, with Google paying $125 million to continue its charge on the eCommerce front as well.

With Wavii going for an estimated $30 million and 13 companies still accounted for, we can deduce that Google, like Yahoo, has also been making its fair share of small-ticket acqui-hires over the year. In fact, Google acquired 53 companies in 2012, chief of which was Motorola Mobility at a price tag of $12.5 billion. The rest of its acquisitions cost $1.1 billion.

Notably, Google was in the midst of carrying out this M&A strategy when Marissa Mayer left the company to become CEO of Yahoo, and it’s clearly one that she’s now using to shore up Yahoo’s weaknesses. Yahoo spent most of 2012 wrapped up in internal struggles and attempted board takeovers. Compared to Google’s 53 acquisitions in 2012, Yahoo only made two — both of which took place only after Mayer had taken over.

Since Mayer took the reins last summer, Yahoo has accelerated its acquisition strategy exponentially, making a whopping 18 acquisitions. And, while that’s mind-boggling enough as it is, Yahoo is likely far from calling it quits. As my colleague Alex Wilhelm recently pointed out, Mayer actually has plenty of runway. Thanks to its stake in Alibaba, Yahoo has an ace up its sleeve that’s potentially worth tens of billion of dollars and which can continue to fuel its aggressive M&A strategy.

For many reasons, this is critical if Mayer is to have any shot at turning the ship around. If Yahoo really wants to strengthen its position in mobile and revamp its aging video and media technology, the company has to continue going after outside talent.

Similar Approach To M&A, Different Stories

While Yahoo and Google are both making headlines for the slew of acquisitions they’ve made over the past year — and the money they’re spending to do it — this shared approach says very different things about what each company perceives as its greatest need (read: deficiency). Yahoo’s biggest problem, at least in the short term, is PR.

In other words, when Mayer took the helm, Yahoo has been spinning in circles for years. They were directionless and basically seen as a has-been company that had lost its relevance in the modern tech industry. By acqui-hiring young talent, Mayer is showing that she’s eager to return Yahoo to its former standing and regain its luster — in part, by make it attractive to younger entrepreneurs but also by updating its product to make Yahoo a destination for younger people in general.

Its billion-dollar acquisition of Tumblr is a prime example: Tumblr’s core user base consists of young people, teenagers and middleschoolers. So not only was Tumblr an opportunity to make Yahoo seem like a cool company for young people and generate more traffic, but it also allows Yahoo to play to its strength, leveraging its ad network to monetize Tumblr’s massive content silo.

Mayer’s approach to M&A is also proving that the company is eager to fix its lagging mail, search and news tools, which have been gathering dust and have been eclipsed by the likes of Google and Microsoft.

Some of these problems will be easy for Yahoo to address and fix in the short term, but they could also create more issues for the company over the long-term. Yahoo is attempting to make a litany of significant, structural changes all at once, making it tough to achieve any kind of real cohesion across its products. It may do wonders for the stock, but it could easily end up being an ad hoc, duct-tape-style solution that leaves the real, infrastructural dangers roiling beneath the surface.

In contrast, it’s taken years for Google to achieve any sort of cohesion across its own disparate products and projects. But its recently embarked on a new, “One Google Era,” in which the company has begun to prioritize collaboration and unification across its properties, which, in turn, gives more meaning to both its M&A and product strategies.

Google’s acquisition of Waze, for example, allows it to add a social layer to its existing mapping and navigation products, strengthening an already formidable arsenal of mobile properties, rather than, in Yahoo’s case, allowing it to start from square one.

Google is now focused on becoming a big data empire and adding pieces that will help it power its massive cloud services infrastructure and products that are decidedly focused on real time. This applies across its diverse properties, whether that’s to allow people to collaborate and communicate in real time through Hangouts, Docs or Gmail, search in real time or navigate in real time through Google Maps and Waze.

Going forward, Google will begin looking more to acquire and build products that will prepare it for increasingly direct competition with companies like Amazon. One place that Google has been struggling of late is in its e-commerce and shopping, where its ambitions haven’t been met with the usual rewards or dominance it’s come to expect from its ventures into search, mobile and advertising.

For example, while Google’s dominance in search remains, when it comes to discovery and engagement around products, Amazon has been leaving it in the dust. If Larry Page’s mission is for Google to use its real-time infrastructure to create utilities that are critical to their everyday lives — whether in communication or otherwise — falling behind in product marketplaces is a big problem.

That’s likely why Google is working to boost its marketplace ambitions with products like the rumored “Helpouts,” which could help find a real home for its mobile payment products, like Wallet, and communication product like Hangouts to power real-time commerce. Amazon and eBay have been busy tearing down the walls that stand in the way of buying and selling on the web. Now Google wants to join the fun, and tools like Helpouts point towards a future in which Google may begin acquiring the kind of talent that can help it to build a real marketplace on top of search and other core products.

FTC To Review Google’s Waze Acquisition On Antitrust Grounds


Google’s $1.1 billion acquisition of social mapping startup Waze has drawn the attention of the Federal Trade Commission after all. The Wall Street Journal reports today that Google has been contacted by FTC lawyers intending to conduct an antitrust review of the acquisition. Google declined to comment but did confirm to the WSJ that it has been contacted by the FTC over the deal. The news was reported earlier by the New York Post which cited two sources “close to the situation”.

According to the WSJ, which said it talked to lawyers familiar with government antitrust investigations, the FTC may have asked Google not to integrate with Waze, pending its review. It also notes that Waze’s revenue was too low to trigger an automatic review by the FTC — but that does not stop the agency stepping in to examine deals after they close, as it now has.

Google stepped in and picked up Waze earlier this month, ending months of acquisition rumours in which the service had been linked with a variety of other  suitors — including Facebook, Apple and even Microsoft.

In the end Mountain View walked away with Waze’s crowdsourced traffic data — saying it intends to incorporate Waze’s data into its Google Maps product, likely to enhance the traffic prediction feature. Google also said some of its own mapping technology will be incorporated into Waze. Whatever else Mountain View plans for Waze’s team and data remains to be seen, but there are plenty of areas for Google to explore.

So why is the FTC getting involved now? Google’s purchase of Waze may have attracted the FTC’s attention because its own mapping service is already so dominant globally, with some billion users vs the 45 million app downloads Waze had previously reported.

By buying Waze Google removes a potential competitor to its service — assuming Waze could have grown its user-base to become a head-to-head competitor with Google Maps. The WSJ reports that the FTC would have to determine whether Waze could have managed to challenge Google in that way, or whether there is any evidence showing Google wanted to acquire Waze specifically to prevent a rival buying the company.

Other mapping competitors to Google include Nokia, which acquired digital mapping service NavTeq for $8.1 billion back in 2007; TomTom which licenses mapping data to Apple; and the non-profit OpenStreetMaps crowdsourced map service, which is free to use.

Despite the FTC probe, the WSJ suggests it’s unlikely the FTC will ask Google to unwind the Waze deal — being as it would have to uncover evidence the acquisition would significantly damage competition in the mapping market.

Yahoo’s Shopping Spree Continues With Conference Calling Startup Rondee

Screen shot 2013-06-12 at 11.05.09 PM

Thought Yahoo’s acquisition spree would culminate with a $1.1 billion deal for Tumblr? Nope, not so much. In fact, the buy-happy company just quietly made its second acquisition in 24 hours — in two different markets, no less. Yes, Yahoo followed this morning’s purchase of iOS photo app maker, GhostBird Software, by making a play into the enterprise conference calling space. Wait, what?

Yep, users of six-year-old free conference calling service, Rondee, were tonight informed via email that the startup has been acquired by Yahoo for an undisclosed sum. It will also suffer the same fate met by other recent Yahoo acquisitions — like MileWise, Astrid, GoPollGo and Loki Studios to name just four — in that it will soon be going the way of the dinosaur. After June 30th, the company’s website now reads, users will no longer be allowed to access their data or create new conference calls.

The startup will continue its progressive shut down from there, officially closing operations on July 12th, before ultimately cutting off user access to their calling data on July 30th, the startup said in an email to its customers today (copied below). However, to avoid stranding its users completely on such short notice, the company said that it’s arranging for “user Login ID and on-demand pins to work with InstantConference,” a company (and, previously, a competitor) it describes as a “highly reputable conference calling service.” Not sure that’s much consolation. “Hey, we may be forcing you to leave … but at least the place we’re sending you has electricity, right?”

What’s A Rondee

Rondee, for those who haven’t been following the crowded and congested conference calling market, launched in 2007 on a mission to build the “Evite for conference calls.” The startup set out to lower the barriers to entry in the conference calling arena and make it accessible to the masses. Today, that means it offers basic conference calling capabilities around the clock (for free) to anyone with an email address.

Granted, for those looking to get “fancy” with call recording, like having access to audio, custom tones, call directories and call scheduling, some account setup is required. But that’s about it. Users can choose between free, on-demand conference calling, or free, “Scheduled Rondees,” in which users can pick a future date and time to schedule a conference call and let Rondee send out email invitations to which invitees can respond to and use via the company’s website. Straightforward, easy to use and free.

Of course, while those are traits every company should shoot for, the VoIP market looks a little bit different than it did six years ago, becoming nearly ubiquitous thanks to companies like Skype and Google, meanwhile, startups like UberConference have moved onto free visual conference calling to compete with Hangouts et al. Today, Rondee’s basic VoIP model sounds very familiar.

So Why Did Yahoo Just Buy This?

While Yahoo nor Rondee has shared any real details on the terms of the deal or the motivation, we do know from a quick Google search (and a look at its press page) that the startup has been pretty quiet of late. Sure, it’s likely this wasn’t an exorbitantly expensive buy for Yahoo, but this also hasn’t been an area of strength (or focus) for Yahoo for a long time, which starts to make it seem like there isn’t really a good explanation for this one.

Maybe Yahoo wants to integrate Rondee into its internal conference solution, for internal IT use, seeing as it’s cheaper than buying an enterprise solution? Probably not.

Er, Maybe Because…

What may be more likely (and hopefully is the case) is that Yahoo liked the team and was eager to make use of its talent, so Marissa Mayer pushed Yahoo’s Acme Acqui-hire Button so that Rondee can join it in re-building Yahoo Messenger. Maybe? After all, on its website, Rondee says that it will be joining Yahoo’s Small Business Team, so while it may be a stretch, motivation could lie in the company’s has-been messaging client.

Marissa Mayer has made talent acquisition one of her top priorities since becoming CEO, and mostly her shopping spree has targeted mobile — in other words, showing the company understands that its mobile strategy and products have to evolve if Yahoo ever hopes to be truly relevant again. (And, really, it’s probably a little late, but…)

Right now, it’s easy to take a look at Yahoo’s product portfolio and sigh. Case in point: People used to Yahoo Messenger as their go-to chat app. (Well, some people did, somewhere. We’re still trying to find out who they are exactly.) But the point is that Yahoo’s messaging client used to be enormous, and now it’s about as cool as the Macarena. Meanwhile, sadly for Yahoo, gamified and chat-ified messaging apps are all the rage and continue to proliferate, especially in emerging markets. In some Upside Down World, this could mean that there’s still opportunity here for Yahoo.

Don’t Shoot The Messenger?

Though with Google’s assets like gChat, Google Voice, Gmail and Hangouts, just to name a few, Yahoo has a long way to go. A pretty long way. Sure, if anyone knows how to get Yahoo up to speed using Google’s playbook, it’s Marissa Mayer. But then there’s WhatsApp, iMessage, Viber and too many more to name. Google launched free voice calling from Gmail nearly three years ago, and adding similar capabilities and enhancements to Yahoo Mail would make sense — and wouldn’t hurt. Of course, even if it were somehow able to pull it off, weakly copying Googles Roadmap doesn’t do Yahoo any favors. It’s dangerous and, well, just sad.

Or maybe not. Maybe Yahoo will use Rondee as part of a foundation on which it will build a Hangouts competitor. Why the world needs that, of course, is another question entirely — sorry to say, Yahoo Mail diehards.

These are a few possible explanations for Yahoo acquiring Rondee, though I’m not sure they’re particularly satisfying. To this point, it’s worth reading this post (really, lament) on Yahoo Messenger from Yahoo’s former director of global tech initiatives. Marissa Mayer seems to be making an effort to address some of the internal idiocy Smith cites as contributing not only to the downfall of Messenger itself but to the downfall of products subsequently created (internally!) that might have saved it or at least prolonged its life.

Mostly, Smith attributes Yahoo’s struggles to crappy leadership, a management focused on preservation rather than trimming-to-grow or innovation, the ole “it’s hard to get stuff done at a big company” line and a lack of a unifying product vision. The latter of which, at least, fittingly smacks of the very product strategy currently at work in Google Land.

This seems to be a familiar tune at Yahoo, though it is heartening that some of that stuff is fixable. However, watching Marissa Mayer acquire all these startups that are on their last lifeline or just keeping their head above water is suspect. Now, it could be questionable in a good way, provoking media attention, buzz and providing a (relatively) cheap way to bring in quality talent. And maybe we’re watching a grand vision unfold, with Marissa acting as the Great Unifier it sounds like Yahoo desperately needs.

Sure, this could be akin to watching Tony Stark miraculously build an Iron Man suit from spare parts and scrap metal … or this turnaround strategy very well prove to be suspect in the same way that a bunch of bricks painted yellow does not gold bullion make.

For more, find Rondee’s email to users below:

Dear Rondee User:

We thank you for being with us over the last six years as we grew Rondee’s free conference calling service. It has been a privilege to work with you.

Yahoo! has just acquired Rondee, and we will be joining Yahoo! Small Business to continue innovating with technologies that help small businesses and groups.

Starting July 12, 2013, RONDEE WILL NO LONGER BE OPERATIVE. To minimize inconvenience to you, we have arranged for your Login ID and Rondee On Demand PINs to work with InstantConference, a highly reputable conference calling service. InstantConference has created a special free plan for Rondee users with unlimited minutes, unlimited conferences and up to 150 callers per conference.

You’ll do On Demand calls with InstantConference the same way you did with Rondee:

If you want to use advanced features such as audio recording, call scheduling using the Outlook add-on or real-time monitoring, you’ll need to log in to the account created for you at InstantConference.

There are three main differences between advanced features on Rondee vs. InstantConference:

Call recording works differently on InstantConference. Instead of activating audio recording in advance online, the organizer does it on the call by pressing *9 and entering the 4 digit code shown above, or by turning on audio recording through a moderator control panel. Learn More

InstantConference has a fully featured moderator control panel. You can monitor call attendance, mute, disconnect, or lock the conference in real-time. Learn More

InstantConference has a different way of handling scheduled conferences. Rather than the web-based format used by Rondee, InstantConference offers an Outlook Add-On which is convenient and easy to use. Learn More

CLICK HERE for Terms and Conditions.

CLICK HERE for Privacy Policy.

For Premium users with balances in their PayPal account, we will be refunding those balances right after July 12, 2013. InstantConference also offers toll-free conferencing with plans as low as 2.9 cents a minute.

PLEASE NOTE: The Rondee service will soon no longer be operative and will no longer accept new sign-ups. Current users will be able to continue using Rondee for conference calls through July 12, 2013 and log in to access account information through August 12, 2013.

For questions about the Rondee service or your Rondee account, click here.

For questions about InstantConference, click here.

Thank you again for your support,

The Rondee Team

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