Google announces that it plans on buying the application programming interface or API specialist Apigee for approximately $625 million in a bid to push its next business venture into enterprise services.
With the software company's shares increasing more than two times their original value this year, the Mountain View firm is set to purchase each share for $17.40. The deal is expected to be completed by the end of the year.
As for the reason behind the acquisition, Google appears to be aiming at providing more offerings to corporate customers. On that note, Apigee develops APIs geared toward the commerce industry, building software that's designed to serve as a channel between companies and their customers and partners.
For instance, if a consumer wants to buy a product via a mobile app, they will likely do it on software that uses API to transmit the details of the transaction to the retailer's system. Apigee builds those tools for such companies who aren't inclined to develop their own internally or independently.
Notable clients of Apigee include but are not limited to pharmaceutical company Walgreen, major U.S. carrier AT&T and luxury fashion retailer Burberry, who all pay the software firm a portion whenever its API is used.
The news started making rounds online when Google Senior Vice President Diane Greene spread the word via a blog post, where she explained why such an acquisition is beneficial in the company's efforts.
"They're the hubs through which companies, partners and customers interact, whether it's a small business applying online for a loan or a point of sale system sending your warranty information to the manufacturer," Greene says.
In an interview with Recode, she also provided an explanation why, among the numerous other companies, Google picked Apigee in particular.
"This is a great one. As we spend more and more time with our enterprise customers — current ones, future ones, ones in the process — the API systems come up continually. Since I've started, I've had two [customers] ask what they thought of Apigee. The partners out there are saying that getting their API strategy functioning is a key step for their business," Greene tells the news outlet.
Simply put, Google is out to get a strong position in the industry, and this latest move is one of its biggest attempts to date.
In other related news, the company recently launched a stream of automated insights powered by AI technology for Google Analytics, yet another tool that businesses can take advantage of.
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