Flipboard Buys Out Competing App from CNN

Flipboard is an app that allows you to curate or create your own magazine based on news feeds. In addition, you can follow the magazines of others according to area of interest. Or, if you want to browse their “recommended reading,” you can do that subject. Basically, Flipboard allows you to customise a magazine for your mobile device according to your own preferences.

Flipboard is a free app; they make most of their money off of advertising. Apparently, there is a lot of money to be made because Flipboard reportedly spent $60 million to buy out a competing app from CNN called “Zite.” CNN’s parent company, Time-Warner, had previously bought Zite for $20 million from its original developer in 2009. In other words, if the reports are correct, Time-Warner just made $40 million for buying an app, holding it for five years and flipping it.

According to the CEO, founder and developer of Flipboard, Mike McCue, Zite’s recommendation engine and other technology were the linchpin of the deal and will be incorporated into Flipboard. This means that Zite will not survive as a stand-alone product, but since Flipboard is free, it won’t inconvenience Zite users too much.

Classified as a “news reader,” Flipboard boasts over 100 million users and incorporates feeds from Facebook and Twitter, as well as mainstream news outlets.

What It Means to You

The first takeaway is that there is a lot of money in apps. Zite was started, sold for $20 million and then reportedly sold for $60 million five years later. In addition, Flipboard makes their money solely from advertising and had enough money to pay $60 million to buy out a competitor and incorporate their technology.

The next takeaway is something that we have stated on a regular basis here when asked for advice on how to create an app: find a problem, a need or a want that feels like a need and fill it. People want information. They want to be able to curate it on autopilot. Flipboard allows users to have their own news magazines delivered to their mobile devices free of charge.

If you think you can solve a problem or fill a need with an app, call 1300 650 253 and let’s start its development.

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