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All those incredibly interesting apps are amassing huge sums of money. The money they earn is often reinvested into other companies by way of acquisitions. Snapchat has just made big news in financial circles for its desire to buy a search startup. The startup is called Vurb and, truthfully, not a lot of people are all that familiar with it. Snapchat obvious is. The company is in talks to spend upwards of $100 million for the startup.
Vurb has been around for five years. The concept behind Vurb is to present a search engine that creates an overall “experience” to “find, save, and do the best things”. The Vurb has its fans, but the search engine is hardly the size of Google or Bing.
Vurb is a mobile app and it integrates with various consumer and retail services. So, Vurb is a targeted search engine designed to help facilitate specific purposes. Among the reasons why search engine startups that seek to challenge Google fail is Google already delivers the seemingly perfect search engine experience. Smaller search functions that work on targeted niche operations do have a better chance of success. Partnerships with other entities further aid the success potential.
Vurb clearly is an app that is successful or else there is no way any entity would even fathom a $1 million investment much less a $100 million one. The deal Snapchat is working, however, only entails 25% in cash. The remaining 75% is in stock. Those who hold major stakes in Vurb may want more in cash. Whether or not the deal goes through still remains to be seen. Everything depends on how much Snapchat wants the app.
The tech industry has seen a lot of company’s launched with the exit strategy of being sold. To those who may not be familiar with the tech industry, this may seem odd. In reality, selling out at a profit to a larger company better capable of running the venture as the industry landscape changes.