According to Norwegian Mac Site Mac1, Apple has bought up all of the shares of a Swedish face recognition company called Polar Rose. An example of their technology can be seen above (Flashless). Google translated:
The Malmö-based company specializes in developing technology which makes facial recognition, not unlike what Apple already has and uses iPhoto for Mac OS X. Through sophisticated algorithms, manages the software of the Arctic Rose to recognize faces in images and the company offers three different products using this solution. Two of the (Face Cloud and FaceLib) them seem to be very interesting for Apple.
Neither Apple nor Polar Rose would comment on the buyout speculation but Polar Rose took down its Flickr service late last month.