A big win for app search startup Chomp as it heads to Apple

In what could pave the way to a better app discovery experience in the iTunes store, Apple acquired app search startup Chomp for a reported $50 million.

It’s a big win for Chomp’s team, as the company had raised just $2.5 million from BlueRun Ventures, Ron Conway and other angels.

And it go could a long way in helping Apple cope with one of the app stores’ biggest emerging problems — discovery.

Even though there are now more than 500,000 apps, the top charts and the featured section are still how most consumers find new apps. It’s basically like having old, Yahoo-era discovery with curated directories in what is becoming an overwhelming amount of content. The ‘Genius’-powered personalized recommendations are underutilized and underdeveloped.

Apple’s own app store search is also not as refined. It mainly matches app names to queries, instead of looking more closely at the user’s real intent. If app search was more holistic, it could factor in more data points like how the consumer most often uses their phone, where they are or what apps are their current favorites.

Chomp’s search does a little bit of this. It looks for apps based on what they do, not just what they’re named. So if a consumer looks for “arcade games,” it will find actual arcade games, not just apps with the word “arcade” in their names.

Chomp seemed to have built a viable business model even though it’s historically been hard to convince consumers to download an app to discover more apps. Chomp had a deal with Verizon to power its app store search results, and it also recently turned on search advertising. That gave developers the ability to bid on ad space that appeared alongside search queries, in an Adwords-like auction model.

At the time, Chomp’s chief executive Ben Keighran told us that the Verizon deal and the advertising revenues would probably be enough to avoid having to raise another round.

Now that Apple has swept in to claim Chomp, it’s a chance for the team to execute its ideas on a much broader scale. Apple has sold more than 315 million iOS devices to date. And with more than $97.6 billion in cash and liquid investments, Apple has been in a position for a very long time to big-ticket acquisitions. A $50 million deal is pocket change to them.