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Microsoft purchases popular keyboard maker SwiftKey for $250 million

swiftkey-6-themes

The Financial Times is reporting that Microsoft has purchased popular third-party keyboard maker SwiftKey for $250 million. While SwiftKey is most known for their predictive keyboard, the acquisition is more of an artificial intelligence play for Microsoft.

While this deal could be seen as just the latest in a line of Microsoft purchases of popular apps, it is not. A source told the FT that, “There’s a war for talent in artificial intelligence…” A majority of the company’s 150 employees around the world are expected to join Microsoft Research. In 2014, Google purchased another UK based startup working on AI for £400m.

Over 300 million people use the Android and iOS app, but SwiftKey has yet to find a reliable business model. Initially, SwiftKey was a paid app before switching to a freemium model where users pay to customize and get different themes. There are still premium versions of the app, but most people make do with the free version. While $250 million is a large sum, many investors have said that the price is lower than they would have expected a few years ago.

As a sign that that is a more of a means to get AI talent, Microsoft recently ported their Windows Phone keyboard to iOS. It’s highly unlikely that the company needs more keyboard apps. Furthermore, the built-in iOS and Android keyboards have long ago integrated similar prediction and swiping features.

Whether Microsoft will continue to support SwiftKey is unknown. We will find out more details of the deal when it is officially announced later this week.

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Comments

  1. applegetridofsimandjack - 8 years ago

    Google and Microsoft are really good at acquiring useless or near bankrupt companies. It’s unbelievable! Wtf is Microsoft going to do with SwiftKey?

    It’s like Apple buying Dûrex.

  2. AeronPeryton - 8 years ago

    “If you can’t beat them, buy them!”

    (You have to read it in younger Bill Gate’s squeaky voice)

    • Seika - 8 years ago

      Faster and cheaper than reinventing the wheel for something they need.
      Without needing to go straight against an already strong brand.

      Besides, sometimes, it seems like the job of convincing the users to switch out from a service that has become their “comfort zone” is far more difficult than the technology job to make a product that is better (while the champion is already “good enough” and “all my friends are here”).

      • “Faster and cheaper than reinventing the wheel for something they need.”

        Would love to know specifically what it is about a software keyboard they feel they could not reinvent with a 250m budget! ;-)

        Although one would hope though the majority of the 150 employees were working on something other than just bug fixes and occasional updates…

    • Aunty T (@AuntyTroll) - 8 years ago

      Beats Electronics.
      Flyby Media
      Emotient
      Legbacore
      Faceshift
      Perceptio
      Vocallq
      Mapsense
      Embark
      Swell

      Just ten of the 78 companies Apple have acquired since 1988.

      If you can’t beat them, buy them indeed.

  3. Tinny - 8 years ago

    Aaaaand the best keyboard on iOs is gone

  4. JBDragon - 8 years ago

    This is the keyboard I’ve been using for a while now. I hope MS doesn’t screw it up. But I do have to say if it was Apple, they would remove the App and all traces of the program and then maybe use it themselves in the future.

  5. The IP100 team is thrilled that Swiftkey, one of the top IP League table entrants, achieved a significant and deserving exit premium, in a deal worth a reputed $250m. SwiftKey was awarded 4th place in our IP League Table and a transaction of this magnitude provides clear evidence that the IP League Table can put the spotlight on IP-rich companies and the help companies get a return for the investment they have made in IP. We truly believe this not only validates the IP100 process and IP scoring system, but provides further evidence of the need for the IP100 platform to help companies prepare better for a successful fundraising and exit.

    We genuinely look forward to losing our next IP League Table entrant, through acquisition, as the commercial value of their IP is recognised as a real differentiator in their market.

    Of course we are now wondering how many more $200m plus valued companies there are hidden away in our IP League Table and how many of them will speed up their growth after the update on the IP100 is announced in a couple of months!

    More information at http://metispartners.com/ip-league-table-2/application-form/