"One of the first developers to create gadgets for iGoogle was Labpixies. Over the years, we worked closely together on a variety of projects, including the launch of a number of global OpenSocial based gadgets. Recently, we decided that we could do more if we were part of the same team, and as such, we're thrilled to announce the acquisition of Labpixies. We are looking forward to working with Labpixies to develop great web apps and leverage their knowledge and expertise to help developers and improve the ecosystem overall," mentions Google Code Blog.
iGoogle really needs some new ideas to remain relevant. The updated interface launched in 2008 and the social gadgets launched last year weren't very popular. For example, the NY Times Crossword gadget developed by LabPixies only has 92,000 users, although it was a featured social gadget.