Many Maryland business owners may be familiar with the adage that says you have to spend money to make money. That is why many established companies make the decision to purchase up-and-coming businesses. Tech giant Apple has recently bought a small company called Burstly, which changes the way that apps are tested.
It is unknown how much Apple paid for the company. For the most part, Apple has been making small Business acquisitions in the past few years. However, it did buy a semiconductor company in 2013 for $345 million. But, when compared to other technology giants such as Facebook and Google, that amount is chump change.
Burstly allows app developers to expand their reach by allowing their apps to be tested by others. Apple already has restrictions in place in regards to beta testing on its platform, so by using third party companies such as Burstly, developers can bypass these restrictions and continue to reach users.
Will there be similar transactions for Apple this fiscal year? Apple spent $525 million on Business acquisitions last quarter, which was double what the company spent the entire fiscal year before that.
There are many things to think about when purchasing a business. Large companies want to increase their revenue by buying businesses that are already profitable. They don't want to get involved in companies that have low sales or a lot of debt. In addition, they have to think about the future. Will the company they intend to purchase still be profitable five, 10 or 20 years down the road? Large companies have to determine if the rewards outweigh the risks.
Source: Los Angeles Times, "Apple ramps up acquisitions, buys app testing company Burstly" Chris O'Brien, Feb. 21, 2014