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Apple Snaps Up Chomp To Revamp App Store; Coy On Dividend

Apple Snaps Up Chomp To Revamp App Store; Coy On Dividend
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2/24/2012 9:46 AM ET

Cash-rich Apple Inc. (AAPL: Quote) has acquired Chomp Inc., a San Francisco-based startup that operates a search engine for apps, various reports said Friday.

Bloomberg puts the acquisition at $50 million, citing a person familiar with the matter. Apple reportedly plans to use Chomp's technology to revamp App Store to make it more user friendly and faster. At Apps Store, about 550,000 iPhone and iPad apps are currently available.

The acquisition comes as Apple is counting down to the 25 billionth download from the App Store. Chomp's search engine takes into account the apps' functions, rather than just its title and keywords.

Chomp currently offers the discovery tools for Apple's iPhone and iPad as well as Google Inc.'s (GOOG) Android applications. The company also powers Verizon Wireless' Android applications search, but this partnership may likely end once the acquisition by Apple is completed.

Chomp was founded by Australian-born Ben Keighran and Cathy Edwards. Keighran is the chief executive officer of Chomp, while Edwards is the company's chief technology officer.

Chomp's investors include BlueRun Ventures, Ron Conway and SV Angel, Aydin Senkut, David Lee, Brian Pokorny and Auren Hoffman. The company counts actor Ashton Kutcher and Digg founder Kevin Rose as advisors.

Meanwhile, Apple has not yet decided what to do with its huge stockpile of cash, including whether to pay a dividend to shareholders. The company has accumulated $97.6 billion in cash and investments on its balance sheet.

The question of renewing the dividend, which has become more acute as the company amasses a cash horde, is less about what to do with its mounting reserves and more to do with what kind of company Apple sees itself in the post-Steve Jobs era.

Apple's CEO Tim Cook has publicly admitted being not as "religious" as Jobs about maintaining cash reserves.

At Apple's annual shareholder meeting on Thursday, the first since Steve Jobs passed away in October, Cook hinted that the company's board is nearing a decision on whether to pay a dividend to shareholders. He, however, admitted that Apple has "more cash than needed" to run the company. Apple last paid a dividend to shareholders in 1995.

In a separate development, Apple informed iPhone customers in Germany on late Thursday that push email service is currently unavailable for iCloud in Germany.

Apple said that due to the recent patent litigation by Motorola Mobility Holdings Inc (MMI: Quote), iCloud and MobileMe users are currently unable to have iCloud and MobileMe email pushed to their phones while located within the borders of Germany. The company said it believes Motorola's patent is invalid and is appealing the decision.

In early December, Motorola Mobility said it won a German court ruling against Apple, on its claim that Apple has infringed its patents related to its data packet transfer technology. The court granted Motorola Mobility's requests for an injunction and also held Apple liable for damages.

AAPL closed Thursday's trading at $516.39. In Friday's pre-market, the stock is adding $2.06 or 0.40 percent to $518.45.

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by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

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