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Riya sold to Google for $40M?

Lots of buzz out there that Google has aquired Riya, the start-up that uses facial recognition technology to allow you to tag your pictures more efficiently.

The rumor is $40 million, but this is still in the rumor category, because Riya chief executive Munjal Shah refused to comment on the rumors during Riya's launch party Friday at Michael Arrington's place in Atherton.

We find the possibility of such an acquisition quite outlandish, considering Riya has had only something like 15 to 25 users in its first "alpha" testing phase, according to Shah Friday evening. Maybe one of them was Google co-founder...

Larry Page?

We last wrote about the company here, where we mentioned a trend of bigger companies like Google scooping up smaller companies before venture capitalists get to them. As the competition intensifies between Google, Yahoo and Microsoft (GYM), this arms-race may get as feverish as the one between Cisco, Nortel and Lucent during the first bubble era.

We note that Munjal, on his blog as recently as Nov 10, was still talking about "options" for his second round of financing. So maybe what happened was that Google approached Riya, and threw out an offer, and they've been negotiating? And thus producing the rumors? Yet we find it hard to believe this has been wrapped up within six days.

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Finally I saw the demo this past weekend. My two cents on Riya (IMHO)

1. The product is a overkill for the market they are trying to address. It is an engineering innovation not a solution

2. There is a company in San Jose called Adobe. They will have something to say about this space.

3. There may be market for embedded image recognition technology just like in OCR market space.

4. The team needs well grounded product manager.

Ramana Kovi

Ramana Kovi on November 21, 2005 11:00 AM
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So, what is the main application? I cannot quite figure it out myself

life is a venture on November 21, 2005 3:07 PM
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Why would they sell for so little? Especially since they just took a $4 million round of funding. That round should have probably valued them at least that much ($40m), so selling now would mean little/no gain for the recent investors.

Arvind Saxena on November 21, 2005 6:09 PM
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Interesting stuff and I feel a big fish like Google or Microsoft can sure make a lot of business around it. Thinking hard on possible stand alone applications.. infact folks at Riya are also looking for us to feed them :-))

Sunil Mishra on November 21, 2005 8:01 PM
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Ramana, actually Riya is more of an engineering innovation. The regular home user won't find too much use out of it. But that's the marvel of the acquisition.

Probably, Google sees opportunity in their face-recognition technology that can be pretty much developed into anything else!

Oskar Syahbana on November 23, 2005 9:45 AM
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Being able to run Riya on all of Google's images would improve picture search by orders of magnitude.

And the technology has other valuable applicaitons such as identifying porn images and video.

If the technology works, $40m is a steal.

pwb on November 23, 2005 1:12 PM
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40 mill for Riya, 580 mill for myspace. How much are they willing to pay for Enron?

Hoodia on November 24, 2005 6:52 PM
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