Next: Yahoo Also Eyeing Automated Video App Maker Qwiki in $50 Million Deal
According to sources close to the company, Yahoo is considering paying up to $50 million for Qwiki, the New York startup that makes an Apple iPhone app that allow users to turn photos, music and videos into short movies automatically.
Context & Ripple Effects
Yahoo's reported interest in Qwiki follows a $30 million Summly acquisition centered on a young mobile product team and the much older Maven Networks video acquisition. Alongside the confirmed Tumblr purchase, the pattern is Yahoo using acquisitions to add consumer-product capabilities rather than relying solely on internally built services.
Qwiki would bring an iPhone tool built around automatically packaging users' photos, music and video into short movies. The report is unconfirmed, but its pickup across several tech outlets underscores how closely Yahoo's acquisition strategy is being watched.
First-order effects
- If completed, a deal worth up to $50 million would put Qwiki's automated-video app and team inside Yahoo, giving Yahoo a consumer-facing mobile creation product.
- Yahoo would be directing another acquisition toward mobile product capability, extending its earlier video focus beyond distribution infrastructure.
Second-order effects
- Qwiki's iPhone experience would make Yahoo more dependent on Apple’s platform for reaching users’ personal media, while giving Yahoo a reason to compete for time spent creating and sharing short videos.
- The proposed purchase would reinforce Yahoo's use of acquisitions to obtain compact product teams, a signal to mobile startups that Yahoo is an active buyer alongside its larger Tumblr transaction.
Third-order effects
- If Yahoo can combine mobile-native acquisitions such as Summly and Qwiki with its earlier video investments, the company is shifting from the portal model toward app-based creation and consumption experiences.
- The pattern points to consumer internet incumbents treating automated media creation as a product capability to acquire, not only a feature to build in-house.
The trend: Yahoo is using acquisitions to assemble mobile-first consumer products and video capabilities around changing habits for creating and sharing media.