Yahoo Buys Qwiki for About $50 Million
As AllThingsD reported two weeks ago that it was likely to do, Yahoo said it has bought Qwiki, the New York startup that makes an Apple iPhone app that allows users to turn photos, music and videos into short movies automatically.
Context & Ripple Effects
The deal completes the previously reported plan to buy Qwiki and follows Yahoo’s iOS-app refresh, which incorporated Summly’s summary technology. Alongside the earlier Summly acquisition, Qwiki adds another narrowly focused mobile capability to Yahoo’s product effort.
The significance is less the size of the purchase than its fit: Yahoo is using acquisitions to bring differentiated mobile features and teams inside the company rather than developing every feature internally.
First-order effects
- Qwiki’s iPhone app, automated movie-making technology and team move under Yahoo’s control in a transaction valued at about $50 million.
- Yahoo gains an in-house capability for automatically combining users’ photos, music and video into short-form movies.
Second-order effects
- Yahoo’s mobile product teams can weigh Qwiki’s media-creation features alongside the Summly-derived summarization already used in Yahoo’s iOS app, reducing the need to build comparable capabilities from scratch.
- Qwiki’s standalone app becomes dependent on Yahoo’s product priorities rather than its own independent roadmap.
Third-order effects
- If Yahoo continues pairing small mobile acquisitions with updates to its core apps, mobile product differentiation shifts toward buying specialized teams and features rather than relying solely on internal development.
- The pattern points to an acquisition-led rebuilding of Yahoo’s mobile experience, with the strategic test being whether distinct startup technologies can be integrated into coherent Yahoo products.
The trend: Yahoo is assembling mobile product capabilities through targeted startup acquisitions, combining specialized consumer features under its own app portfolio.