January 13, 2015

Facebook acquires two California tech startups

Facebook continues to look for ways to expand into new IT areas. Last week, the social network completed the acquisitions of two California startups whose technologies could help Facebook compete with other IT giants. Wit.ai, based in Palo Alto, specializes in voice recognition software, and QuickFire Networks, of San Diego, is developing technology that could support high-quality video without using prohibitively large amounts of bandwidth.

Voice recognition is fast shedding its novelty status and is now a basic feature of many new smartphones from Apple, Google and Microsoft. It is increasingly used for messaging as well as for intelligent personal assistants like Google Now, Microsoft Cortana and Siri. Wit.ai is already used by more than 6,000 developers. The company and some of its employees, including three co-founders, will move into Facebook's Menlo Park headquarters.

The acquisition of QuickFire is meant to ensure that video quality doesn't suffer as its use increases, which it has done since videos began playing automatically on Facebook's news feed. The company says that one billion videos are viewed on its platform every day. It could also potentially serve to ensure decent quality in emerging markets or areas with poor connectivity.

Facebook has not revealed the value of the two acquisitions, its first of 2015. Last year, the company spent a staggering $22 billion on instant messaging app WhatsApp and $2.3 billion on virtual reality company Oculus VR, the two highest-profile of a slew of deals.

In the always active world of technology mergers and acquisitions, M&A advisors can help companies explore their options and make the best deal available.