Yahoo! acquires MessageMe chat app

Tech giant Yahoo has acquired mobile messaging app MessageMe, with hopes to chip into the WhatsApp dominated messaging app market. The deal is reported to be in the double digit millions and some reports peg it at $11.9 million. MessageMe is the brainchild of Arjun Sethi and Justin Rosenthal.

Yahoo has been severely lacking for a long time in the instant messaging department after the fall of its once mighty Yahoo messenger. With smartphones moving to app based messaging, chat applications on desktop have taken a backseat. Yahoo’s own messenger does not even figure in the top 500 apps on iTunes according to app rating service App Annie.

The MessageMe acquisition is being seen as a favorable turn of events for the app’s employees and investors who have been offered favorable terms as part of the deal instead of a hostile takeover, reports suggest. The announcement has only been done internally at Yahoo so far. The MessageMe team will begin work at Yahoo on Monday.

MessageMe showed promise and lure to investors in early 2013 when it raised a total of $11.9 million in two rounds of funding led by Silicon Valley venture capitalist majors like ex-Mozilla CEO John Lilly, Google Ventures, True Ventures, SVAngel and Andreessen Horowitz.

The messaging app managed to gain 5 million users within 2.5 months of its launch and was seen as a break-out app. It did not however maintain these levels of growth in following months.

Yahoo’s acquisition of MessageMe is being viewed in two lights. One, that the tech company is slowly picking up acquisitions after its pockets were bolstered by the recent Alibaba IPO. The second guess is that MessageMe will be incorporated into Yahoo’s own mobile app called Yahoo Instant which has been in the works for several years but faced several delays.

Coming days will show whether MessageMe continue to stand as an app developed under Yahoo or takes a different turn.