Apple acquires Chomp to redefine App Store discovery

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Apple (NASDAQ:AAPL) has acquired mobile application discovery solutions provider Chomp, a move that promises to dramatically overhaul the App Store shopping experience. Apple confirmed the deal but did not disclose the purchase price; citing a source familiar with the negotiations, Bloomberg reports Apple paid about $50 million.

The free Chomp app, available for Apple's iOS as well as Google's (NASDAQ:GOOG) Android Market, leverages a proprietary algorithm to learns the functions and topics of apps to enable users to conduct app store search queries based on app function and utility, not brand name. Consumers can search Chomp for subjects like "puzzle games," "expense trackers" or "chat" to identify the solutions they wish to download. Conventional wisdom suggests Apple will integrate the Chomp solution directly into the App Store search bar.

In 2011, Verizon Wireless (NYSE:VZ) began shipping Android smartphones preloaded with the Chomp app, enabling subscribers to more efficiently search Android Market as well as the operator's own Verizon Apps storefront. Last fall, Chomp also introduced Chomp Search Ads, an auction-based platform giving developers the opportunity to bid on keywords or search phrases that deliver their applications when subscribers input those query terms. Research firm Gartner calculates that developers typically spend anywhere between 20 percent and 30 percent of total app revenues on efforts to acquire new users through a range of advertising and marketing initiatives.

It is unknown whether Apple will continue to operate Chomp as a standalone business. In the case of previous acquisitions like streaming music provider Lala, purchased in late 2009, Apple shut down the service and integrated the technology and/or engineering staff into its own efforts. "We buy smaller technology companies from time to time and generally don't comment on our purposes or plans," an Apple spokesperson told Bloomberg.

Apple's App Store now boasts more than 550,000 iOS applications, and is fast approaching the 25 billion download milestone. But as the store has grown, so have developer frustrations over app discoverability. Earlier this month, Apple warned iOS developers to avoid services that promise to artificially inflate their App Store rankings, threatening the loss of Apple Developer Program membership for anyone found gaming the system. Last year, Apple began rejecting iOS applications running incentivized install promotions designed to vault their applications into the upper rungs of the App Store's bestseller lists.

For more:
- read this Bloomberg article

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Apple smacks down incentivized iOS downloads
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