There have been a number of important acquisitions in the tech sector throughout 2013. Google's acquisition of Waze, Yahoo buying image-recognition startup LookFlow, and Twitter's acquisition of MoPub are all prime examples. And these acquisitions all make perfect sense: Google is looking to supplement its own mapping services with those of Waze; Yahoo is trying to beef up Flickr via LookFlow; and given Twitter's recent move from private to public, MoPub's mobile app advertising platform was a sensible investment.
But not every acquisition follows such transparent logic. There are many that have raised eyebrows or resulted in a general state of confusion among observers, both within and outside of the tech industry. Sometimes, acquisitions are made that don't seem to make any sense, at least not on the surface.
Below are three such acquisitions made by tech companies this year and some educated speculation as to why they might have occurred.
Apple acquires Topsy
Earlier this month, Apple forked over $200 million to scoop up Topsy, a social search and analytics company that focuses on creating tools to measure and track conversations on Twitter. Among other functions, Topsy's technology allows people to track how often a term is tweeted, find influential people and specific subjects, or measure the success and reach of a particular promotion or event.
The acquisition doesn't really seem to align with Apple's core business, so it's not entirely clear why it was purchased. Apple's PR response -- "Apple buys smaller technology companies from time to time, and we generally do not discuss our purpose or plans" -- doesn't shed any more light on why they might have acquired a social media analytics company.
While Apple remains tight-lipped about the purpose behind the purchase, some strategic reasons behind the move have been speculated. Bloomberg News has pointed out that it could be useful for many of Apple's existing services, like iTunes Radio and iAd, or it could be leveraged to make purchase recommendations from iTunes and the App Store.
It's also entirely possible that, given Topsy's search functionality, Apple is trying to splinter off portions from Google's search. Maybe Apple is gearing up to slowly challenge the iron grip that Google has on the search engine market. Maybe 2014 will be the year that Google starts seeing some actual competition. We can only speculate as we wait to find out why Apple made this acquisition or how they ultimately plan to use Topsy as they move forward.
Square buys Viewfinder
Square, a mobile payments company that focuses on payment processing, very recently acquired a photo-sharing app called Viewfinder. The latter was working to build a social network that allowed users to share their photos and then revoke access when they no longer wanted people to see them.
This acquisition raised some eyebrows initially because there appears to be no connection between Viewfinder's technology and Square's core area of business. Furthermore, the app will more than likely shut down once the company has completed the transition, with Viewfinder stating "existing users will still be able to use the Viewfinder app for the time being, although we will no longer be releasing updates or providing customer feedback."
Though photo sharing and payment processing are fundamentally different areas, Square appears to have made the acquisition simply to access Viewfinder's employees. VentureBeat posits that it may have been acquired less for its photo-sharing technology and more for its engineering talent, but maintains that you can't rule out Square adding some kind of social component to its core services.
Dropbox is sold on Sold
Sold was a startup that helped people determine how much to sell things for through a proprietary pricing technology. It also handled almost all of the legwork involved in the selling process, from finding a buyer to arranging shipping and payment. It was like selling something on Amazon, only easier. Useful, yes, but totally unrelated to the cloud storage services provided by Dropbox.
Perhaps stranger is the fact that Sold decided to sell. Backed by $1.2 million dollars of funding, the young startup was projecting $1 million+ in annual revenue and was showing a 50 percent growth rate month over month. Yet ultimately, they pulled the trigger on the deal and were absorbed by Dropbox.
Much like Square's acquisition of Viewfinder, this is probably more of a talent acquisition move by Dropbox than an attempt to further Sold's services. In fact, Dropbox plans to take the Sold team and have them design and develop a "new mystery commerce product," to use TechCrunch's words. What that might look like isn't yet clear, and we can't yet entirely rule out the possibility that Dropbox might dip their toes into the e-commerce market.
While the majority of important acquisitions that occurred over 2013 were made for fairly obvious reasons, I think the ones that are seemingly strange business decisions on the surface are the most exciting. It's an interesting exercise to speculate what these transactions mean and how they might affect and help shape the direction of the tech industry. We may not know how this will play out, but there is one thing that is certain: 2014 will be witness to some exciting developments.
Jeff Quipp is an expert on digital marketing. He is the founder and CEO of Search Engine People Inc. (SEP), Canada's largest digital marketing firm, which has been on the PROFIT 100 ranking of Canada's Fastest Growing Companies for the past five consecutive years and named one of PROFIT Magazine's 50 Fastest Growing Companies in the Greater Toronto Area. Follow Jeff on Twitter at @jquipp or connect with him on Google+.