Google’s Riya Designs?

Update: Tentative confirmation of the deal at $40 million.

Exclusive: To paraphrase a popular Bollywood ditty, Is Google singing O Riya! O Riya!

Since this past Thursday, I have heard whispers that Riya, a Redwood City, California-based photo service is being courted by Google. Now this rumor has been repeated by multiple sources, though not one of them is directly involved with the two companies. One of them indicated that this is still at due diligence stage. I am putting this in highly rumored and unconfirmed category. “Your inquiry is about rumor and speculation and we’re not able to respond to questions of this type,” Google spokesperson Barry Schnitt told me. I have left message for Riya founder Munjal Shah and also emailed him, but thus far no response.

Riya, as a company hasn’t even launched, and is supposed to have a coming out event at Tech Crunch’s BBQ this friday! Riya’s technology could be used to extend Google’s reach in the picture domain, where they are completely overshadowed by Yahoo. If this company ends up in the hands of Yahoo, well as far as photos go, its end game! I wonder if Microsoft made a play for the company? Of course, Riya is just the kind of technology that could help tag the photos of the big GigaPixel project.

If and that is a massive if, the deal happens, it could be part of the continuing trend of Google acquiring innovative start-ups and talented teams, in early stages. I have a story in the next issue of Business 2.0 (same as the one which has Erick’s Flickrization of Yahoo story) that analyzes Google’s buyout strategy. This one might diverge from that strategy slightly, because (as per Silicon Beat) Riya’s backers are Leapfrog Ventures and Bluerun Ventures and have invested close to $4 million in the company.

Updated: Niall thinks the price is going to be $40 million. Paul says even he was hearing the same story in corporate boardrooms.

PS: I guess I am officially off the GYM diet.