Yahoo buys 'widget' maker Konfabulator

By MICHAEL LIEDTKE

AP Business Writer

updated 8:01 a.m. ET July 25, 2005

SAN FRANCISCO - Hoping to pave a new path to its popular Web site, Yahoo Inc. has acquired Konfabulator, a tiny software maker that provides a computer platform for monitoring the weather, stock prices and a wealth of other customized information without opening a Web browser.

The deal, finalized late last week for an undisclosed price, gives Yahoo access to a toolbox of mini-applications — known as widgets — that have built a cult following since Palo Alto-based Konfabulator first introduced them for Apple Computer Inc.'s Macintosh in 2002.

Apple liked the concept so much that it includes a widgets dashboard in the Mac's operating system. With just three employees, Konfabulator designs its widget software to run on the ubiquitous Windows operating system as well.

The widgets are designed to make it easy for outsiders to develop and share new applications — a concept that Yahoo wants to encourage as it experiments with new ways to make the wealth of information on its Web site more useful, said Toni Schneider, vice president of the company's developer network.

"We are lowering the bar and letting people do a lot more with our material," Schneider said.

Online search engine leader Google Inc., one of Yahoo's biggest rivals, recently began encouraging third-party developers to plug in new applications for its mapping service, which already is being tweaked to track crime and apartment vacancies in some cities.

Konfabulator's widgets will be exposed to a much wider audience under its new ownership. Yahoo ended June with 181 million registered users.

The widgets will draw upon information and services already on Yahoo's Web site without requiring a browser to see it. The material instead is displayed through an animated icon on the computer desktop.

To help popularize the widgets, Yahoo plans will give away the Konfabulator software that empowers the applications. Konfabulator had been charging $20 for the software. Anyone who bought version 2.0 of the software since mid-May will be given refunds, said Konfabulator CEO Arlo Rose.

Yahoo can afford to be generous, having made $755 million in its most recent quarter, including a $563 million profit from selling its remaining stake in Google.

The Sunnyvale-based company still expects to make money from Konfabulator.

Yahoo is counting on the widgets to make users more curious about certain topics, services or events, ultimately driving more traffic to its Web site so it can serve up more moneymaking ads and expand its current base of 10.1 million subscribers who pay for premium services, Schneider said.

Konfabulator's widgets can be programmed to perform a wide variety of tasks. The most popular applications are local weather and stock quotes, Rose said, but third-party developers have developed thousands of other uses.

For instance, there are widgets that monitor the local traffic or show the remaining power left on a laptop computer's battery. Other more whimsical widgets serve up comic strips and horoscopes.

The Yahoo deal "gives us whole new buckets of content to grab stuff from." Rose said.

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