Why did Nike buy this digital media start-up?

Nike has purchased the digital start-up founded by a former NFL quarterback that was developed to give fans better access to celebrities, and a second app that was meant to help predict the outcome of sporting events.

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Nike confirmed its purchase of TraceMe, the celebrity platform, and Tally, the sports prediction app in a statement to FOX Business.

“Nike, Inc. has acquired TraceMe to supplement the company’s content strategy on Nike-owned platforms,” the company said.

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It's not immediately clear how Nike intends to use TraceMe and Tally, but the Tally website, playtally.com, had been taken down as of Wednesday.  According to GeekWire, TraceMe employees plan to move to Nike Seattle. TraceMe CEO Jason LeeKeenan and other top employees have already changed his job title on LinkedIn. He lists himself as the lead at Nike’s Seattle office.

The purchase appears to be the first step into enhancing Nike's digital media presence to maximize ad revenue. TraceMe was designed to connect fans with athletes and celebrities and when it pivoted to Tally it became a sports-prediction app that was used by some sports teams and venues, Nike could have another avenue to advertise to the sports fan.

TraceMe was originally founded by Seattle Seahawks quarterback Russell Wilson in 2017 and aimed to give fans access to celebrities with behind-the-scenes content. Wilson helped raise $9 million from organizations including the Jeff Bezos-linked group Bezos Expeditions, according to Sports Pro Media.

However, the company eventually pivoted in November 2018 and formed Tally – a platform geared toward sports teams, broadcasters and sports venues to drive fan engagement around sporting events.

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A source told Tech Crunch that the billion-dollar American sportswear company had more interest in acquiring the technology behind TraceMe rather than Tally’s.

Andy Campion, Nike's executive vice president and CFO, highlighted the importance of the company's strategic investments going forward in a statement accompanying its first-quarter earnings report.

"Our targeted strategic investments are accelerating Nike’s digital transformation and extending our competitive advantage," Campion said.

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This story has been updated.