It feels like paid apps and services and the people who make them get acquired more often and I’m not sure what it means

Thursday morning, the folks who make WordPress.com (Automattic) acquired Simperium, the folks who make Simplenote and a sync platform for developers. It’s the latest in what feels like a growing number of acquisitions of popular or blossoming paid apps and services—not just the ‘give it all away for free’ companies with questionable futures.

I’ll be honest: I don’t have a powerful insight into what, if anything, is going on and what it might mean moving forward. I just hope I’m not the only one with questions.

To be fair, Simplenote seemed fairly popular among general nerds but wasn’t isn’t a paid app. Creating text notes and syncing them between your devices is free with ads, or $20 per year to ditch the ads and gain some great features. Plus, by Automattic’s own word, it’s not an “acquire-hire”, where the smart personnel are hired but the product and its users are left out in the cold. The company plans to continue developing both Simplenote and the Simperium sync service for its own apps and other uses.

Another recent acquisition is ThisLife, a service you may have heard of but probably haven’t used. It is only the most recent in a long line of challengers to the throne of photo and video sharing that Flickr generally let collect dust these last few years. ThisLife has a great iOS app and quite a balanced freemium model—you can try it free with 1,000 photos, and start paying $3 and $6 after that for more space and better features. As of earlier this month, ThisLife was acquired by Shutterfly which, like Automattic, claims it will continue development.

Of course, who could forget Sparrow, the excellent “premium” iPhone client (costing the whopping price of 3/4 of a Starbucks) by developers were acquired by Google not long after they teased an iPad version on the way. However, unlike Simplenote and ThisLife, Google is comparatively up front about the purpose of the acquisition: it is primarily talent, not product. Sure, you may catch a glimpse of Sparrow’s spirit in future Google products, but Google hired that team for the team.

While I don’t have hard numbers on how successful any of these companies actually were, they all seemed to be doing well, or at least well on their way. Simplenote had plenty of nerd and writer customers. It regularly got plenty of genuine, free press and its premium fee is reasonable enough. ThisLife coverage was increasing, it had recently introduced new pricing, and I noticed more folks regularly sniff it out. Sparrow certainly seemed to be a runaway hit among plenty of folks who happen to A) use an iPhone and B) send email.

Now, I’m not one to beat the drum of “you should pay for everything you use”, though I am an advocate of taking a step back to think about the pros of the tools you use, paid and free. I’m also not criticizing any of these companies for their success. I’m actually quite happy for them. They worked hard, they deserve it.

But most of the acquisition stories over the last few years seem to come from the “give it all away for free” side—the companies and products like Dodgeball, Stamped, Siri, MySpace, and many, many more that the crystal ball was always a little fuzzy about. Lately it feels like more companies and products with straightforward business models and the user base (or at least momentum) to make it work are signing on the dotted line, and I’m not sure what it means.

Is this a fundamental industry shift, or just a growing door though which sound companies can step to build even bigger and ideally more sound products? Should users be concerned that more small apps and services, once seemingly stable in their independence, could go the acquisition route and suddenly change direction, however small or large, under new management? Is there even much reason for concern at all?

Liked this post? Follow this blog to get more.