I'm the head of IT for a small internet company that has developed a free iPhone app that promotes the use of our product. Due to time constraints, we haven't done anything with it for almost a year, but it still manages 200-300 downloads a week. We in the middle of revamping our entire retail operation, and have envisioned several ways to tightly integrate the app with our shopping experience, though this probably wouldn't happen for another 6-9 months.

Recently, however, a large company in the same product space (not so much a competitor as a co-existor) has approached us about either buying our app or partnering with us in some way, and we're really not sure how to respond.

We've spent considerable amount of money as well as months of our own time in developing the app, so selling is definitely appealing. While I've always thought licensing was better in the long run, we aren't sure what the advantage is for us - we don't have the time to actively develop, and the rebranded app wouldn't drive any traffic to our business.

We also have some brick and mortar retail partners that has expressed low level interest as using our app as a sort of in-store kiosk (which most likely would drive traffic to us), but that's something we haven't even begun to explore either.

I could see us "leasing" the app, where we maintain it for a certain length of time and the other company pays rebranding, our time, and further development. At the end of the lease, we'd have made some money and would also have a better app. I'm not sure if this is feasible, however, because they certain have in house IT resources that I imagine are at least as capable as I am.

My questions, then: What are the pros and cons of selling and licensing? Are there other partnership opportunities that we should explore? Any tips for questions we should be asking ourselves and our suitors?

Thanks.