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Why Did Google Buy Jaiku?

The acquisition could signal that a Google phone is in the works.

Earlier this week, Google announced that it had acquired Jaiku, a Finnish startup that lets people broadcast short updates about their locations and activities over the Web or to their friends’ cell phones, a concept called microblogging. The terms of the deal haven’t been announced, but regardless of Jaiku’s price tag, the purchase could be a significant one. Google has long been rumored to be working on a mobile phone, or “gPhone”; Jaiku was originally developed as software for cell phones, and one of the company’s cofounders, Jyri Engeström, was a product manager at Nokia.

Quick connections: Jaiku is a messaging service that lets people broadcast short updates about their activities and whereabouts to their friends and families, and even to interested strangers. Users can send their updates from the Web (see screen shots, above) or from a mobile phone. Google bought Jaiku this week, and while it hasn’t announced definite plans for the company, it says that the acquisition will help “drive the next round of developments in Web and mobile technology.”

While Google has refused to comment directly on whether it’s developing mobile-phone products, its activities over the past few months indicate that it is. Google has announced its intention to bid on a large swath of spectrum in early 2008; it has acquired a mobile-phone software startup, Android, based in Palo Alto, CA; and in a handful of public statements, representatives of the company have alluded to trying to make the mobile experience better. When asked for comment, Google referred to its public statement about the purchase: “Although we don’t have definite plans to announce at this time, we’re excited about helping to drive the next round of developments in Web and mobile technology.”

Jaiku’s acquisition also signals that microblogging, a pastime popularized by a service called Twitter, is more than just a passing fad. (See “Is Twitter Here to Stay?”) Jaiku, Twitter, Pownce, Plazes, and Facebook all let people send updates to their friends (and the rest of the world, if they so desire) about what they are doing and where they are. The services differ slightly, but the idea is the same: to give friends, family, and even interested strangers a simple way to stay involved in your life. Jaiku and Twitter are the most similar of the pack. Jaiku doesn’t have as many users as Twitter, the largest of the services, but it does offer some extra features, including downloadable software for the Nokia S60 phone. With the software, the user can revise his or her Jaiku profile from the phone, or browse the phone’s contact list to select people to receive microblog updates.

Biz Stone, cofounder of Twitter, says that Jaiku’s expertise in the mobile-messaging space could benefit Google: “Those guys have a keen grasp of mobile, and it’s probably a good fit for whatever Google’s cooking up.” Stone refuses to comment on whether or not Google approached Twitter for purchase. In July, Twitter received about $5 million in funding, much of which will go toward streamlining operations and expanding the company’s infrastructure as the number of users grows.

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Google isn’t disclosing plans for Jaiku at this point, but some experts are speculating that the acquisition could help the startup gain visibility and expand without too many technical glitches, as the search company is adept at handling technology on a large scale. But Stone says that the acquisition could be more about “a strategic scooping up of talented people” for other projects.

While Google’s purchase of Jaiku could be seen as a threat to Twitter, Stone says that he’s not worried about the competition. “Any kind of movement, whether it be a new company inspired by Twitter, or one being acquired by a larger company, feels like this forward movement in this space,” he says. “It signals that this [microblogging] is much bigger than we’d initially planned.”

Jaiku will still serve its existing users, and these users may invite new friends, but new-user registration was closed after the acquisition. In the coming months, Google plans to launch new products based on Jaiku’s technology. According to a statement on Jaiku’s website, Jaiku users will be among the first to try them out.

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