Microsoft Corporation Continues Its App Shopping Spree

By Evan Niu,

Source: Wunderlist.

Microsoft is at it again. The software giant has just acquired its third mobile app start-up in recent memory. This time around, we're talking about 6Wunderkinder, the small German start-up that makes the popular Wunderlist to-do list app.

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Financial terms were not disclosed, but TheWall Street Journalpegsthe price tag at $100 million to $200 million, which is in line with what app start-ups tend to fetch nowadays.

Source: Wunderlist.

The deal makes perfect sense, since keeping track of a to-do list is a core part of being productive, and Wunderlist has exploded in popularity thanks to its smooth interface, cross-platform support, and compatibility across a wide array of devices. Wunderlist now has over 13 million registered users.

3 apps for $500 millionLast December, Microsoft acquired Acompli, an email app that focused on productivity and integrated with Microsoft Exchange. The company then turned around and rebranded the app as its new mobile Outlook app, changing very little beyond the name. Acompli set Microsoft back approximately $200 million as well.

Fast-forward just a couple of months from then, and Microsoft scooped up another popular mobile app. This time it was Sunrise, a calendar app. Microsoft reportedly paid around $100 million for Sunrise. One commonality between all three apps is that they all featured intuitive interfaces with clean design aesthetics.

That's perhaps half a billion dollars for three apps over the course of six months or so. While that sum may sound like an awful lot of money to you and me, it's actually rather modest for Microsoft (the company spent five times that for Minecraft maker Mojang) and it's more evidence that the software giant is now embracing a more conservative acquisition strategy. That's a good thing.

3 companies for $18.2 billionMicrosoft has made three rather large acquisitions over the past five years that it still needs to work on digesting and integrating, including Mojang.

Source: Microsoft.

Add it all up and we're talking about nearly $20 billion for the trio. With price tags of that magnitude, impairment risk is of particular importance. The last thing Microsoft wants is another aQuantive.

Put another way, goodwill and net intangible assets on Microsoft's balance sheet have ballooned from $13.6 billion in September 2011 (just before the Skype deal closed) to $29.2 billion last December (just after the Mojang deal closed). Microsoft acquired many companies during that time frame, but these three big purchases are the primary contributors to that increase.

What really mattersTech giants continue to be on the prowl for talented developers that have shown an ability to innovate and differentiate themselves in the intensely competitive market for mobile apps.

These acqui-hires are now a common occurrence, but they also represent an important shift in what large companies want to purchase. It's less about getting a big flashy brand (well, Apple just bought a big flashy brand) and more about grabbing the best technology and the smartest people.

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Evan Niu, CFA owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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