Microsoft reportedly purchases Prismatic news reader app for $30 million

Microsoft reportedly purchases Prismatic
A new report suggests that Microsoft, Apple and Yahoo are fighting each other in an effort to purchase social news reader Prismatic. Besides the trio, Google and Facebook are also both said to have an interest in the app. One source says that Microsoft will end up paying $30 million for Prismatic.

Prismatic has apps available for iOS, Android and the web. It scours sites for news you might want to read based on your stated interests, the interests of your friends, and your response to similar news.

According to AppAnnie, Prismatic was launched two years ago, and rose to become one of the top ten iPhone apps. However, it has lost its position over the years dropping down to number 758, which makes us wonder why these large companies were so interested in acquiring it. Last year, it debuted on Android, but the platform has only 5000 to 10,000 users signed up.

Its likely that Microsoft sees Prismatic as a good addition to Bing and a way to bolster its presence on competitors platforms. While $30 million may seem like plenty of money, all of the tech giants doing due diligence on the app can easily afford to make the purchase. If it works out, it's a great acquisition for one of them. If it fails, it's just a $30 million hit.

Prismatic is a start-up and so far it has raised $15 million from the likes of Accel Partners, Jim Breyer, Yuri Milner and Javelin’s Alex Gurevich. A $30 million purchase would see them double their money. Not a bad return on investment.

source - TechCrunch

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