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Google Acquires Bump, But Why?

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    MOUNTAIN VIEW, CA - JANUARY 5: Attendees wait for the beginning of the Google Nexus One Android smart phone unveiling at Google's headquarters January 5, 2010 in Mountain View, California. Google announced the Nexus One smart phone that was designed in a partnership with cell phone maker HTC. (Photo by Robert Galbraith-Pool/Getty Images)

    Google has acquired Bump, a smartphone app company best known around 2008, when users would bump phones to exchange digital business cards. However, Google has decided the app, whose value has dwindled since its launch, is still a deal because of its near-field communication technology - something that Android phones need to compete with Apple's mobile operating software update.

    Android phones have file-sharing but near-field communications isn't on all phones, according to the Wall Street Journal. By acquiring Bump, Google clears that hurdle -- although it did cost the tech titan $40 million.

    The New York Times reported that Bump raised $20 million in venture capital before going through several incarnations as it tried to find a niche in the market. It recently added a photo-sharing app called Flock which is also attractive to Google because it lets users create joint albums.

    The acquisition was also announced as Apple made an announcement of its own, about a wireless file-sharing program as part of its mobile operating system update called AirDrop. Samsung also has something similar called S Beam, which transfers files between some Samsung phones.

    The acquisition is a smart one for Google because it solves its Android fragmentation problem while also directly competing with its rivals.