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Why Google’s Sparrow Acquisition Just Ruined My Morning

45 points by kposehn 14y ago

petercooper 14y ago
Finally, there is an opportunity here for other iOS developers. [..] Sparrow is still tough to beat, but in a year or so, it will have fallen by the wayside, and that’s when the opportunity really shows up. Totally. That's the up-side. But let's imagine a great client does turn up and it's from a group of developers who hate acqui-hires. They realize they need a recurring revenue stream so two situations (of many) might play out. The first is they say upfront their native app is $5/month and people poo-poo the idea of paying a subscription for an app or its traction is otherwise dampened. The second is they sell an app like normal but then try and introduce a recurring charge later on and suffer the ire of their users (we've all seen the "ew, profiteering!" sneers). There's surely a "nice" solution somewhere here, but it seems Sparrow didn't quite stumble across it. Who will or has?
- tomeric 14y ago
  They can always sell the app and charge for updates Tweetie 2 style. Or add in new features via in-app purchases. Or they can charge for push notifications. Sparrow was selling hundreds of copies each day for 25$, they were making a lot of money from it. They probably wouldn't have made 25 million $ like they apparently made with this sale, but it's enough to keep a team of developers happy and productive.
  - petercooper 14y ago
    They probably wouldn't have made 25 million $ like they apparently made with this sale, but it's enough to keep a team of developers happy and productive. Perhaps this acquisition is just the modern equivalent of royalty/noblity calling up artists and poets. Getting "the call" to work at Google is the tech world's equivalent to being appointed poet laureate or court musician.
- ssebro 14y ago
  Google has (figured out how to monetize free-to-use mail). Gmail is free & monetized through ads.
- leftnode 14y ago
  Couldn't developers just build software and sell it without a recurring stream of revenue? I know the holy grail is a monthly charge, but companies are still making a lot of money just selling software for a one time fee. Case in point, Google just purchased Quickoffice (my previous employer) which just sold software (and didn't until a few weeks before the Google acquisition have a recurring fee product).
  - petercooper 14y ago
    They can and do but that's what Sparrow were already doing successfully. That said, everyone (including me) who is speculating a better revenue stream would have prevented them selling out in the first place is merely guessing ;-)
  - potatolicious 14y ago
    They can, and that was the prevailing business model for a long time in the industry. The problem here is that it has little multiplicative power. Selling software is lucrative, but it will rarely make you Fuck-You-Money, and the tech industry nowadays is all about the Fuck-You-Money. Recurring revenue model = incredible potential for revenue growth = justification for insane valuation = gigantic exit, which is what everyone is now looking for in the age of Facebook and Google.
    - rhizome 14y ago
      Who are you talking about when you say "the tech industry," who is "all about FYM?"
      - potatolicious 14y ago
        The tech "community", insofar as it can be generalized, in SF, SV, NYC, and beyond. People seem to have little interest in businesses that generate healthy revenues that will make a few people wealthy - people want to cash out like Sergey and Larry, and there's a stigma for settling for anything less. Note that I'm not saying this is a good thing, it probably isn't, but it's certainly the trend.
pnathan 14y ago
Every time I see something like this, I think about what the general benefit would have been if it had been an open source project. What if a company made & supported their software, selling it as a GPL-based system? Then if they went under (or any other sorts of terminating conditions), the software would still be usable and available.
- cgh 14y ago
  Sparrow is an iOS app. The App Store does not allow GPL'd applications. Also, it's conceivable that Google wants to incorporate Sparrow into their own iOS client offering, so keeping the source to themselves makes sense.
  - vijaykiran 14y ago
    > The App Store does not allow GPL'd applications. I don't think so, Wordpress for iOS is GPL licensed: http://ios.wordpress.org/development/ http://ios.wordpress.org/development/
    - radarsat1 14y ago
      I guess what is going on here is that WordPress owns the copyright to WordPress, and doesn't have any GPL dependencies, so they can do with it what they want. No one else is allowed to make a Wordpress app for iOS, however. (I didn't check and am not familiar with the WP source code.. if they do have any GPL dependencies they might be in violation. Likely their app just presents an interface to communicate with their server stuff, so things like databases or anything else the WordPress server depends on don't count as dependencies for the app--so as long as they wrote the app from scratch they are okay.)
      - bengtan 14y ago
        No they don't. If I remember correctly, Wordpress is a fork of an older GPL cms. They do not have the full copyrights to license it under a license of their own choosing.
blahedo 14y ago
Acquihires always make me feel like this, even for apps I don't use or have never even heard of. From the perspective of a consumer, acquihires send out one, very consistent, message: "we're going to hunt for the best, coolest, most interesting apps that people love and find most useful, and shut them down. Suck it, users!" It's depressing.
rbanffy 14y ago
What if the "other projects" include the Gmail client for Android? A great, cross-platform, Gmail experience is something we can all relate to.

45 points by kposehn 14y ago

Finally, there is an opportunity here for other iOS developers. [..] Sparrow is still tough to beat, but in a year or so, it will have fallen by the wayside, and that’s when the opportunity really shows up. Totally. That's the up-side. But let's imagine a great client does turn up and it's from a group of developers who hate acqui-hires. They realize they need a recurring revenue stream so two situations (of many) might play out. The first is they say upfront their native app is $5/month and people poo-poo the idea of paying a subscription for an app or its traction is otherwise dampened. The second is they sell an app like normal but then try and introduce a recurring charge later on and suffer the ire of their users (we've all seen the "ew, profiteering!" sneers). There's surely a "nice" solution somewhere here, but it seems Sparrow didn't quite stumble across it. Who will or has?

tomeric 14y ago
They can always sell the app and charge for updates Tweetie 2 style. Or add in new features via in-app purchases. Or they can charge for push notifications. Sparrow was selling hundreds of copies each day for 25$, they were making a lot of money from it. They probably wouldn't have made 25 million $ like they apparently made with this sale, but it's enough to keep a team of developers happy and productive.
- petercooper 14y ago
  They probably wouldn't have made 25 million $ like they apparently made with this sale, but it's enough to keep a team of developers happy and productive. Perhaps this acquisition is just the modern equivalent of royalty/noblity calling up artists and poets. Getting "the call" to work at Google is the tech world's equivalent to being appointed poet laureate or court musician.
ssebro 14y ago
Google has (figured out how to monetize free-to-use mail). Gmail is free & monetized through ads.
leftnode 14y ago
Couldn't developers just build software and sell it without a recurring stream of revenue? I know the holy grail is a monthly charge, but companies are still making a lot of money just selling software for a one time fee. Case in point, Google just purchased Quickoffice (my previous employer) which just sold software (and didn't until a few weeks before the Google acquisition have a recurring fee product).
- petercooper 14y ago
  They can and do but that's what Sparrow were already doing successfully. That said, everyone (including me) who is speculating a better revenue stream would have prevented them selling out in the first place is merely guessing ;-)
- potatolicious 14y ago
  They can, and that was the prevailing business model for a long time in the industry. The problem here is that it has little multiplicative power. Selling software is lucrative, but it will rarely make you Fuck-You-Money, and the tech industry nowadays is all about the Fuck-You-Money. Recurring revenue model = incredible potential for revenue growth = justification for insane valuation = gigantic exit, which is what everyone is now looking for in the age of Facebook and Google.
  - rhizome 14y ago
    Who are you talking about when you say "the tech industry," who is "all about FYM?"
    - potatolicious 14y ago
      The tech "community", insofar as it can be generalized, in SF, SV, NYC, and beyond. People seem to have little interest in businesses that generate healthy revenues that will make a few people wealthy - people want to cash out like Sergey and Larry, and there's a stigma for settling for anything less. Note that I'm not saying this is a good thing, it probably isn't, but it's certainly the trend.

pnathan 14y ago

Every time I see something like this, I think about what the general benefit would have been if it had been an open source project. What if a company made & supported their software, selling it as a GPL-based system? Then if they went under (or any other sorts of terminating conditions), the software would still be usable and available.

cgh 14y ago
Sparrow is an iOS app. The App Store does not allow GPL'd applications. Also, it's conceivable that Google wants to incorporate Sparrow into their own iOS client offering, so keeping the source to themselves makes sense.
- vijaykiran 14y ago
  > The App Store does not allow GPL'd applications. I don't think so, Wordpress for iOS is GPL licensed: http://ios.wordpress.org/development/ http://ios.wordpress.org/development/
  - radarsat1 14y ago
    I guess what is going on here is that WordPress owns the copyright to WordPress, and doesn't have any GPL dependencies, so they can do with it what they want. No one else is allowed to make a Wordpress app for iOS, however. (I didn't check and am not familiar with the WP source code.. if they do have any GPL dependencies they might be in violation. Likely their app just presents an interface to communicate with their server stuff, so things like databases or anything else the WordPress server depends on don't count as dependencies for the app--so as long as they wrote the app from scratch they are okay.)
    - bengtan 14y ago
      No they don't. If I remember correctly, Wordpress is a fork of an older GPL cms. They do not have the full copyrights to license it under a license of their own choosing.

blahedo 14y ago

Acquihires always make me feel like this, even for apps I don't use or have never even heard of. From the perspective of a consumer, acquihires send out one, very consistent, message: "we're going to hunt for the best, coolest, most interesting apps that people love and find most useful, and shut them down. Suck it, users!" It's depressing.

rbanffy 14y ago

What if the "other projects" include the Gmail client for Android? A great, cross-platform, Gmail experience is something we can all relate to.