Apple Acquires Chomp For Roughly $50 Million

Apple has acquired Chomp, a service that helps people discover applications on the Apple App Store and the Google Android Market. As Apple nears 25 billion app downloads, one of the biggest problems they have is app organization. Their algorithms for app searches seems to be changing every time they introduce a new form of app revenue like paid apps, free apps with in-app purchases, subscription apps, etc. Hopefully the acquisition of will help them organize apps better in the future.

It used to be the higher the sales of a paid app, the higher it would rank certain apps based on keywords. Now it appears to be some kind of combination of sales, the name of the app, and when the app was updated last. There are also free apps that have a lot of in-app purchases. Figuring out how to fairly rank those apps can be challenging too. After all free apps tend to get a lot more downloads than paid apps, but that does not mean that paid apps should face the consequences.

Upon first impression I did not get why Chomp could be worth so much. After visiting their website, it just seemed like another glorified website built on iTunes and Android Market APIs. But once you start comparing the search results for keywords on iTunes against, you start noticing subtle strengths that has. For example, I searched for the word “clock” on iTunes and I found some junky apps while returned some better results.

Another reason why Apple believes that Chomp could be so valuable is because they have a deal in place with Verizon to power all Android-based app searches. This deal will most likely end when Apple’s acquisition of the company closes. Chomp has raised $2.5 million in venture capital funding thus far and it is rumored that the acquisition was for $50 million.

Chomp’s CEO Ben Keighran is now an employee of Apple’s iTunes Marketing and Chomp’s CTO Cathy Edwards is now a Senior iTunes Engineer.

This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at
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