Nick Bradbury, creator of RSS reader FeedDemon, has announced that his one-person company has been acquired by NewsGator.
FeedDemon is a fairly popular feed reader with a good number of subscribers, so an acquisition to try to move those subscribers over to NewsGator might make sense.
For the remaining hundreds of small, undifferentiated feed readers, I suspect we'll mostly see them stall or fade away in the next year or two as Yahoo, MSN, IAC/Ask/Bloglines, and other giants gobble up the market. Simple products that merely reformat feeds for display are sitting in a saturated market.
But so much more can be done with RSS and Atom feeds. Feeds are data. They can be sliced and diced, reorganized, analyzed, and filtered. Sorting articles by feed or by date is trivial. Sorting articles by relevance is the future.
Every day, people face an overwhelming flood of information. Products that help users find focus and discover the information they need are entering a wide open field with massive consumer demand. The opportunity is huge for those willing to take it.
See also Chris Pirillo's interview with Nick and NewsGator CTO Greg Reinacker that includes some discussion of competition with Bloglines. Tony Gentile has some useful comments on the acquisition. Om Malik deserves credit for breaking the news.