Telstra’s newest business venture

Telstra acquires a stake in a US apps maker. Here’s what it means for investors.

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Telstra (ASX: TLS), the $56 billion telco, has invested a relatively small sum in a new and exciting business venture by purchasing a US$18 million stake in Kony Solutions, “a leading mobile and multi-channel application platform and packaged applications provider” based in the US.

The upshot of the Kony investment

Telstra plans to market Kony products to its customer base in Australia, for instance by selling pre-built apps to its business and enterprise customers.

The investment was made by Telstra’s venture capital wing, Telstra Ventures, which, according to the company’s website: “invests in breakthrough companies that are strategically important to Telstra… which leverage Telstra’s assets and enable Telstra to offer new products and services to its customers.”

Telstra Ventures has offices in Australia and California’s Silicon Valley. It has previously acquired stakes in video company Ooyala, IPscape and Dimmi.

The Foolish bottom line

For Telstra, such acquisitions are a relatively low-risk way to stay up-to-date with the latest tech trends, explore new products for its customer base, and keep an eye on the possible competition. No shareholder would hope to find Telstra asleep at the wheel on this crucial front.

Like the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO), Telstra shares have given back much of the gains they’ve made year to date. Still, over the last 12 months, the shares have risen a full 27% versus a corresponding 17% rise in the index.

Attention investors: Discover whether Telstra shares are buy, sell or hold! Get a top analyst’s latest Telstra recommendation in our brand-new investment report. Click here now, your copy is FREE!

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Motley Fool contributor Catherine Baab-Muguira does not own shares in any company mentioned in this article.

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