Yahoo continues buying spree with Qwiki purchase

Yahoo continued its acquisition spree on Tuesday, jumping on the micro video bandwagon with the acquisition of Qwiki. The US startup has iPad and iPhone tools that turn a user’s photos and videos into short movie montages.

Pricing and fine details of the acquisition were not revealed but Yahoo has said that it will continue to support the Qwiki app.

The move comes in the wake of a flurry of interest in short form video, since Facebook-owned Instagram last week launched 15 second video clip capabilities and saw users publish more than five million videos in the first 24 hours. Then of course there’s Twitter’s Vine offering.

It’s also a wonder where Yahoo got the Qwiki cash from. Just over a month ago the company moved to acquire blogging platform Tumblr for $1.1bn in cash.

According to Yahoo’s latest financials, cash, cash equivalents, and investments in marketable debt securities totalled $5.4bn as of March 31, 2013 compared to $6bn as of December 31, 2012. Yet actual cash only totalled $1.2bn, so this latest acquisition must have wiped out Yahoo’s liquid reserves. The firm also acquired UK startup Summly in March for around $30m.

In some ways these acquisitions are seen as a last ditch attempt to keep Yahoo relevant and CEO Marissa Meyer made a promise during the Tumblr announcement “not to screw it up.”

But the big question now is how these moves fit in with Yahoo’s other similar-sounding, picture-focused blogging social site, Flickr. Mayer had said that the photo sharing site was a top priority for investment in an attempt to regain lost ground on rivals Facebook, Twitter, Google and Instagram. It remains to be seen how that will play out now the money has been spent and the company has three photo focused networks in its stable.