Reasons Behind Yahoo! Inc. (YHOO)’s Acquisition of Messaging App Blink


Yahoo! Inc. (NASDAQ:YHOO) has bought and acquired Blink, a mobile messaging venture that allows the user to preset a time after which the message deletes itself. 


The deal has been published by Blink on its website and it comes hardly days after its rival, Snapchat, settled charges with few US regulators who accused the social interaction application of falsely promising its customers that pictures sent through it automatically disappear after a fixed time.

Blink, launched in April 2013, said that its app in both Android as well as iOS platforms will be shut down in a few weeks, following the acquisition. Terms and conditions about the acquisition were not disclosed. Yahoo! Inc. (NASDAQ:YHOO) did not comment the deal.

During a program, CNBC‘s Jon Fortt and Jon Steinberg, the president and COO of BuzzFeed discussed possible reasons for Yahoo!’s latest acquisition. They both agreed that the deal was most likely an acquisition for hiring people that used to work for Blink.

Watch the full video below:

Blink is a product of Meh Labs, a venture founded by ex – Googlers, Kevin Stephens and Michelle Norgan. The company said that Blink was developed because it believed that everyone should exhibit the same spontaneity and honesty in online conversations, like they do in person. Meh Labs is also well known for its location sharing application, Kismet.

This move comes at a time, when Yahoo! Inc. (NASDAQ:YHOO)’s Chief Executive, Marissa Mayer has been stepping up the company’s efforts to build services, available online, for tablets and smart phones which are used increasingly by customers to access the Web. Ever since Mayer took over the company, Yahoo! has acquired several small, innovative, mobile startups. It has a user base of 430 million monthly users of its mobile products.

Mobile messaging apps have a huge user appeal of free services offered through them and this attracts huge buyers, especially in the past year. These buyers intend to capitalize on this aspect, especially in emerging markets.

Interestingly, Snapchat received a buyout offer from Facebook Inc. (NASDAQ:FB) in 2013, which it rejected. Facebook went on to acquire Whatsapp for $19 billion later on, which turns out to be its largest acquisition so far. In February, Rakuten Inc. (TYO:4755), a Japanese e-commerce establishment, acquired Viber, a mobile application enabling free calls and messages, for $900 million.