Google Inc.
(
GOOG
) recently announced its acquisition of Nik Software, a 17 year old
company, which specializes in advanced photo editing. The terms of
the deal were not disclosed.
San Diego-based Nik Software develops digital image editing
tools. It offers a variety of photo editing software for Windows
and Mac OS X computers. Its popular mobile app Snapseed is
currently available only on Apple devices but will be available on
Android devices soon.
Google is a market leader in online advertising and it has been
trying to explore various ways to increase its advertising revenue
and fight competition. The company had stepped up its efforts in
social media with its social network Google+, a service started in
2011 competing directly with Facebook.
The addition of Nik will likely bolster Google+ by bringing in
online photo editing tools. Google also owns Picnik, the online
photo editor, which has incorporated its high-end tools into
Google+, including light and pixel size adjustments, color patterns
and filters.
The Nik acquisition will allow Google to provide advanced photo
editing features, hence enhancing the already-robust suite. By
acquiring Nik Software, Google might be better positioned to
compete against Facebook and others in the social media space.
The acquisition comes soon after the web giant
Facebook
(
FB
) completed its own purchase of the photo-sharing app Instagram,
which further strengthened its dominance in photo uploading and
sharing. Like Instagram, Snapseed also has comprehensive in-app
photo editing functions and photo-altering filters including
tilt-shift effects, which make the photos more attractive.
Instagram has more than 100 million users, while Snapseed has
approximately only 9 million users.
Google continues to pick up smaller companies with specialized
technology to boost its different offerings. Just last month, the
company acquired marketing start-up Wildfire that provides software
to help businesses place ads on social-media sites, strengthening
its foothold in the world of social media. In June, the company
bought Meebo for about $100 million that makes mobile applications
for consumers as well as publishers, designed to enable online
communication.
Google has done very well in the second quarter, with its gross
revenue touching a record $12.21 billion. Revenues from both
Google-owned and partner sites continued to grow double digits on a
year-over-year basis. Historically, Google has always fared better
than
Yahoo Inc
(
YHOO
), which has been struggling, and
Microsoft
(
MSFT
), which is yet to gain critical mass.
However, other legal entanglements related to competitive
matters or patent infringements remain an overhang. Google retains
a Zacks #3 Rank, which translates into a short-term Hold
rating.
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