For the first time in ages, Google Inc (NASDAQ:GOOG) is striking back at Yahoo! Inc. (NASDAQ:YAHOO). In a move mirroring Yahoo! Inc. (NASDAQ:YAHOO)’s recent purchase of news summarization app Summly for $30 million, Google Inc (NASDAQ:GOOG) also purchased its own news summarization app, Wavii, for roughly the same price.
Over the past few months, Yahoo! Inc. (NASDAQ:YAHOO)’s ecosystem has been growing, through a series of ‘acqui-hires’ engineered by CEO Marissa Mayer, and the company is reportedly in talks with Apple Inc. (NASDAQ:AAPL) to cut Google out of the iOS loop once and for all. Have all the years of market domination and making industry enemies finally caught up with Mountain View, Calif.-based Google, and should investors be worried?
Summing up the news
News summarization apps, such as Summly and Wavii, aggregate news stories from various websites, then summarize them into bite-sized pieces through a special algorithm. This makes them ideal for mobile devices. Meanwhile, Apple Inc. (NASDAQ:AAPL) expressed interest in acquiring Summly’s rival, Wavii, to be incorporated into its voice-activated personal assistant, Siri.
These two developments apparently made Google nervous, so it reportedly purchased Seattle-based Wavii for over $30 million in cash. Whether or not this was a calculated decision or a knee-jerk reaction to Yahoo! Inc. (NASDAQ:YAHOO) and Apple’s recent actions is unclear. Google already has news aggregating apps, such as Google Currents and Google News, so the company may have simply taken Wavii off the market to keep it out of its rivals’ hands.
Wavii, founded by Adrian Aoun, has some big backers. PayPal’s co-founder Max Levchin, former Facebook executive Dave Morin and former Microsoft dealmaker Fritz Lanman were some of the company’s initial investors. Both Summly and Wavii have substantially changed the way mobile users consume news stories, making them viable threats to Yahoo! Inc. (NASDAQ:YAHOO)and Google, which both own highly visited, customizable news sites.
Yet Google, which owns its own mobile operating system, should have a much easier time integrating Wavii into its operations than Yahoo! Inc. (NASDAQ:YAHOO), on the other hand, needs a bigger partner to help it pull together all these mobile apps that it has been collecting over the past few months.