But thriving on innovation alone is not possible. The behemoths of the tech industry like Google Inc (NASDAQ:GOOG) and Apple also give a lot of importance to acquisitions. For instance, Google Inc (NASDAQ:GOOG) had been involved with Apple Inc. (NASDAQ:AAPL) in a bidding war to buy a Seattle based start-up called Wavii, a natural language processing company. Google Inc (NASDAQ:GOOG) won the game and bagged the prize. TechCrunch cites a “legitimate source” as saying that Google has acquired Wavii for a price of more than $30 million.
Other companies like Yahoo! Inc. (NASDAQ:YHOO) are interested in similar acquisitions. Recently Yahoo! acquired Summly, a company providing natural language processing technology that reads news articles, attempts to understand it like humans do, and then summarize it. Yahoo! Inc. (NASDAQ:YHOO) lost its charm in the tech industry long ago and is now making an attempt to get it back. Marissa Mayer, the CEO of Yahoo! has many plans for the future. One of her strategies is to broaden and strengthen Yahoo!’s expertise in the smartphone market. With this in mind Yahoo! has launched a new mobile app based on Summly for the iPhone and Android phones. News aggregator apps are good at grabbing eyeballs, and that is exactly what Yahoo! Inc. (NASDAQ:YHOO) needs at the moment. This can also be considered to an attempt by Yahoo! to showcase that the company has not lost its coolness factor. It is too early to say how much this acquisition would benefit Yahoo! We would wait and watch to see if this is indeed a good deal.
So what is so interesting about Wavii?
Wavii, like Facebook Inc (NASDAQ:FB), generates personalized News Feeds of what’s happening around the world. It uses natural language processing and provides its users with personalized contents. Initially Wavii would provide its users with a few topics from which the users can decide what to follow and what not to. Later on, with time, based on the users likes and feedback new topics would be suggested.
Apple Inc. (NASDAQ:AAPL) wanted to use Wavii’s aggregation technology and natural summarization algorithm for Siri. Siri, as we know, is an intelligent personal assistant and knowledge navigator that works as an application for Apple’s iOS. It has been an integral part of iOS since iOS 5 and was first supported on the iPhone 4s. Apple Inc. (NASDAQ:AAPL) believed that Wavii’s technology could enhance the features of Siri and make it more refined, providing a better user experience.
Apple has been losing its charm in the recent past. There has been no major enhancement in the looks and user interface for iPhones for a long time. Users are getting bored and moving to products based on Android and Windows 8 from OEMs like Samsung and Nokia Corporation (ADR) (NYSE:NOK). Because of this, the share price of Apple has fallen by 35% in the last 6 months. In order to uphold its position in the industry, Apple needs to bring more upgrades to its products, and Wavii’s technology could have definitely helped them in this.
How would the acquisition help Google?
According to TechCrunch’s analysis, Wavii would be a good fit for Google Inc (NASDAQ:GOOG) Now. Also, Wavii’s semantic search technology would be an enhancement to Google Knowledge, as it could further contextualize the information Google currently shows on the sidebar of most searches. The NLP and disambiguation tech could be used across many other Google platforms like Google News and Google Glass. So this acquisition would help Google upgrade various platforms, thus giving a boost to its revenue, which in turn would make the shareholders very happy.
Satish Kumar has no position in any stocks mentioned. The Motley Fool recommends Apple and Google. The Motley Fool owns shares of Apple and Google.
