IAC/InterActiveCorp have bought app developers while smaller companies have begun to assemble properties along with the increasing number of companies that see the mobile industry as a source of continued revenue.
Mobile industry is seen as a source of continued revenue since number of downloads through Apple’s App Store has reached one billion and more than 40 million iPhones and iPod Touches have been sold since 2007.
It is true because developers of programs for the iPhone have suceeded in selling hundreds of thousands of copies of games from their living rooms or garages, and today there is a new way to make profit from writing software for the iPhone is emerging, that is selling the apps and then selling your company.
Now the market for apps has been expanding quickly since Apple showed that new apps sell phones. Today Palm, Research in Motion, Nokia and Microsoft are all building app stores to work with phones running their operating systems. Even noe Apps can also be built for phones running Google’s Android software.
Developers will introduce new products running on Apple’s latest software that enables users to buy subscriptions to applications and easily buy add-ons like access to higher game levels or additional city guides. The potential for added revenue should increase interest from buyers looking for acquisitions.
The increased interest in app developers is being driven by companies seeking to build cellphone apps for their products or services. They see it as a way to reach beyond the Web for consumers. Though many apps are free, the willingness of people to pay 99 cents or more for one gives companies hope that apps may be a more reliable source of revenue than Web sites.
With an instantaneous and established presence on the iPhone platform, , a company could tap into a stable, loyal fan base. For a big company that is trying to go mobile quickly, those few million users are almost more valuable than the property itself.
That was the approach taken by IAC, which has more than 35 Internet-based companies, including Ask.com, CollegeHumor and Evite. Last month, the company bought UrbanSpoon, a start-up based in Seattle that recommends nearby restaurants, for an undisclosed sum. It is one of the App Store’s most popular products, having been downloaded close to five million times.
CitySearch, another of IAC’s properties, first worked with UrbanSpoon to syndicate advertisements and reviews through the start-up’s Web site. When the iPhone application made its debut last July, it was the icing on the cake.
For the three creators of UrbanSpoon, it was partly opportunistic to be bought by a larger company, because the security of a larger company has taken some of the financial stress out of the situation.
Amazon, with its Kindle digital book reader, looked at phone apps as a way to expand the market for the e-books it sells. In late April, Amazon bought Stanza, a software service that allows users to browse and buy from a library of 100,000 books through a phone.
Besides, Tapulous, a start-up in Palo Alto, California,, bought a game called Tap Tap Revenge from its developer, Nate True, in July. The game, patterned after video games like Guitar Hero that challenge players to keep rhythm with popular songs, has been downloaded by one out of every three digital shoppers in the iTunes App Store, according to market research firm comScore.
Other companies are making a business out of acquiring raw programs to redesign, polish and release into the App Store. For example, Ngmoco, a video game start-up based in San Francisco devoted solely to publishing games for the iPhone and iPod Touch, recently bought the quirky, colorful puzzle game Rolando designed by a British developer, Simon Oliver.
Thus far, their approach appears to be working: many of their games rank highly in the App Store’s most-popular lists. The company has four more games to be released in the next two months and 15 new games under development, including several sequels to Rolando.
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