Apple Said to Acquire Color

http://thenextweb.com/insider/2012/10/18/color-gets-acquired-by-apple-rumor/?utm_medium=Spreadus&awesm=tnw.to_a68g&utm_source=Twitter&utm_campaign=social%20media

by zachh • 14 years ago

153 138 14 years ago

thenextweb.com

eliajf3• 14 years ago

Sad if true, for all the hardworking companies out there that are working very hard to make a difference in customer's lives. Only overpriced products with no product/market fit can be acquired for "high double digit" millions.

greendestiny• 14 years ago

I think its probably more to do with large number of patents they claimed to have for localization and sharing. At least that was the hype at the time of their funding.

ctrl_freak• 14 years ago

I don't think Apple buys up companies due to "hype", and considering the amount of negative press Color has been receiving as of late, that seems especially unlikely here. More likely it is a talent acquisition, or as greendestiny suggests, patents.

eliajf3• 14 years ago

I can buy patents but I doubt Apple does an acqui-hire for high double digit millions.

dillona• 14 years ago

Was there ever a time Color received positive press?

I remember when they first came out, nobody could figure out how they raised to much capital.

31reasons• 14 years ago

Its all about relationships with people I guess. It reminds me of this excerpt from a psychology book. "People used to look out on the playground and say that the boys were playing soccer and the girls where doing nothing. But the girls weren't doing nothing- They were talking. They were talking about the world to one another. And they became very expert about that in a way the boys did not"

You can replace 'boys' with 'developers' and 'girls' with 'tech socialites'.

madaxe2• 14 years ago

It's all about having backers who have fingers in pies that they can arm-twist into buying you. It also makes people who have profitable growing startups without funding like yours truly bitter as hell.

timerickson• 14 years ago

I've been a quiet fan of Color since the beginning, from a technology/team standpoint, not a product standpoint. I think its smart for Apple.

We can all agree that the product launch and the product itself was terribly implemented, but that doesn't mean the technology behind it can't be impressive. It also doesn't have to mean that Apple can't make good use of the technology and talent at Color by embedding them into existing teams and apps.

danso• 14 years ago

What technology exactly? Their initial tech claims (which were never verified or detectable in real world usage) were impressive. Their pivot made little mention of using that tech. What tech of Color's can we conclusively say actually works in the real world?

snogglethorpe• 14 years ago

Not to mention:

"Do I need a Facebook Account to use Color?

Yes, your Color account is directly linked to your Facebook account. Everything you do on Color, including photo taking and LIVE video Broadcasting, will be represented on Facebook "

Ugh...

ctide• 14 years ago

If you didn't think the patent system was fucked up before, you sure as fuck should know now.

signa11• 14 years ago

if you don't mind may you please elaborate on the above post in the context of this headline ? thank you !

hrabago• 14 years ago

Because the report says Apple's interest may be in Color's patents.

raganwald2• 14 years ago

Here's the real color.com VC pitch, not the fake one they distributed.

=====

"Look, we want a bunch of money from you VCs. A LOT of it. Here's what we've got: Some great patents, and the prospect of some more as we continue R&D. More importantly, these patents are in a strategically critical space where Google, Samsung, Apple, and Microsoft are all vying for supremacy.

"So here's what we're going to do with your money: Either (a) Shake a bunch of people down for big bucks, in which case we'll need your money for legal fees. Only we may not need it, but knowing we can afford to pay lawyers will make the big guys settle. Or (b) Sell the patents.

"Yeah, we anticipated the "We don't fund patent trolls" objection. Here are the bullshit products we plan to roll out. Sure they suck, but they buy us credibility in the valley as an operating entity. Nobody will accuse you of funding a troll.

"And hey, one of these dogs with fleas may actually catch on, you never know. If not, we shoot it and make another, we just call it "pivoting" while we carry on negotiations for patent royalties.

"Whaddya say, how does M$40 sound, plus an extra mil so we can say "The low forties" on the press release?"

Lukeas14• 14 years ago

According to this article and others those 6 patents are all still pending meaning they haven't yet been accepted by the PTO as valid patents. For less than $400 any of us can file a provisional patent with the PTO that would allow you to claim patent pending status. So unless Apple's lawyers are certain they'll be accepted they aren't worth much of anything right now.

newhouseb2• 14 years ago

You're correct, but in the case of patent acquisitions in many cases having a claim of priority (i.e. filing/invention date) is far more important than whether a patent is granted or not. In any patent litigation, the defendant will argue that a patent is invalid regardless of if it's actually been published.

In other words, when you look at a patent, you can concretely say a couple things: a) what prior art exists and b) what the priority date is. You would like to say c) is this a viable patent, but even if the USPTO grants a patent this is never set in stone (thanks to the court system).

Edit: sounds like the priority dates are all in 2011, which isn't particularly early, still a little dumbfounded.

Apocryphon2• 14 years ago

When has there ever been a wild (non-obvious) Apple acquisition rumor that was substantiated?

bradsmithinc• 14 years ago

Siri and Chomp both come to mind. So does LaLa.

Apocryphon2• 14 years ago

I'm not sure if these were so wild, since they don't seem to be companies as high-profile or controversial as Color. Siri is somewhat wild insofar most people didn't expect that Apple was working on such a project. I'm talking more about the Apple will buy Twitter/EA/RIM stories.

http://technologizer.com/2011/07/29/a-brief-history-of-apple...

mukaiji• 14 years ago

My HN timeline for today:

(morning) "Color to be shutting down" (afternoon) "Color IS NOT shutting down" (evening) "Color is acquired by Apple"

wtf just happened.

jpdoctor• 14 years ago

Someone on the board of Apple is a limited partner of investors in Color?

notJim• 14 years ago

That timeline actually gives you a really good description of "what just happened", and for several values of "just." :D

lifeformed• 14 years ago

(midnight) "Color to acquire Apple"

ChuckMcM• 14 years ago

To answer the question: "wtf just happened."

If you have ever seen the TV show "House" [1] its the part where each doctor makes a different diagnosis and Dr. House keeps trying to fit all the pieces together to get to the real issue.

Clearly Color is in a state of transition, I know of no company with an absent CEO, and no COO, that are stable. The tech "press" is in a feeding frenzy trying to be the first to 'diagnose' the cause and the eventual effect. Apparently its a solid bullet point in one's blogume' to say "I broke the <company> story."

[1] The TV series House as written up by Wikipedia : http://en.wikipedia.org/wiki/House_(TV_series)

tomclancy• 14 years ago

So...color has lupus?

drivebyacct2• 14 years ago

I'm more interested in what this story says about HN? How often does HN get wrapped up in personal stories without hearing the other side? Or get wrapped up in virtually meaningless drama like this such that we have THREE such major "stories" throughout the day distracting from things of legitimate interest or value to "hackers" (or their bossses, etc).

I pay about as much attention to these stories as I do the stories that volley back and forth on peoples' blogs and the front page of HN.

Though I must say, three in one day was enough to troll me into both coming here and even commenting a smidgen of frustration/surprise.

bane• 14 years ago

So is this Color, soon to be seen in the iPhone 5s?

lostlogin• 14 years ago

Color was introduced to the iPod touch a few weeks back, so maybe.

unreal37• 14 years ago

I for one am shocked that The Next Web seems to have done some original reporting here, and not just copying someone else's blog post word for word.[1]

Unless of course the original source blog post for this can be found somewhere...

[1]http://daringfireball.net/linked/2012/05/14/next-web-dirtbag...

pixelmonkey2• 14 years ago

It was obvious from day one that Color was going to be acquired for a pretty penny. It's even in their pitch deck:

http://www.slideshare.net/kitseeborg/color-faux-pitch-ddeck

See slide 45: "We're going to flip this bitch like flipper!"

mikescar• 14 years ago

In the 'faux pitch deck'? It's called a joke.

Or did you really think after Slide 2: "Colors: people love that shit" this was a real pitch deck?

pixelmonkey2• 14 years ago

Wow, apparently my attempt at sarcasm on the Internet failed with some people. Yes, I know the slide deck is a joke. sigh

ericdykstra• 14 years ago

"High double digits" seems like a lot to pay for color.com and @color (although it is a great domain and handle).

Maybe they have some really cool patents that they can use to sue Samsung or Google for $500 million and make the acquisition a net profit.

ezpassmac• 14 years ago

They do have some patent for HD video, battery, and more. Up to 6 is what I've read.

wmf• 14 years ago

Are you valuing all their employees combined at zero?

dmor• 14 years ago

Hard to imagine counting on employees staying

batgaijin• 14 years ago

Nguyen is the Mr. Magoo of startups.

te_chris• 14 years ago

Or the Underpants Gnomes? If only he'd share what the "???" are.

pbreit3• 14 years ago

Considering it likely has double digit millions of dollars left in the bank, sounds low.

jonnathanson• 14 years ago

It's entirely possible that Apple saw, in Color, the ability to acquire some valuable patents, talent, or capabilities at fire sale prices that it would spend a lot more trying to develop in house.

Remember that distressed assets in one company's hands are highly productive assets in a different company's hands. If the company actually has been run into the ground, all the better for Apple, because it can get a steeper discount on the assets it's after.

rdl2• 14 years ago

I'm surprised Palantir didn't buy them just to take over their prime downtown Palo Alto real estate leases (one of the few big spaces not taken already by Palantir...)

newhouseb2• 14 years ago

Well, their current office space is technically illegal as at least the ground floor is zoned for retail. Remember how they had that silly little handwritten note on the (always locked) door that said "hi! We're color, come on in and say hi!"? That, apparently was enough (undoubtedly with their sway with the local govt) to fulfill the requirement that all places zoned for retail be accessible to the public.

rdl2• 14 years ago

I can't believe I hadn't thought of that -- I always thought the big "public cafeteria, come join us for lunch" thing on the ground floor was just space-banking and showing off, and using it as a recruiting tool. Zoning makes a lot more sense (I remember PA whining at Facebook for using that building over on Hamilton for the customer service offices, the one with the nice frosted glass Facebook text on the retail windowfront...)

petercooper2• 14 years ago

As a fellow member of our startup world, congratulations to Color! They deserved success after spotting the opportunity the new mobile era presents for transforming the way people share the stories of their lives. Their constant innovating and striving to learn and grow was sure to bring them plentiful benefits.

JabavuAdams• 14 years ago

Wow, that sounded authentic. I think I just barfed a little in my mouth.

petercooper2• 14 years ago

If it makes it any better, most of the phrasing was from their About page.

iag• 14 years ago

This might be the first time I am using the downvote button after 3+ years on HN... click

cjensen2• 14 years ago

There's no reason for Apple to buy Color. A couple of patents on recently invented stuff? Unlikely. Buying the patents would make sense, not buying the company. Acquire a team? Why not just hire them? Is the team really that attached to a company going nowhere?

So I call this rumor nonsense. On the other hand, if this rumor is true it says a lot about Apple management and none of it good.

eliajf3• 14 years ago

Personally, I'd give Apple's management the benefit of the doubt.

r00fus• 14 years ago

And Google buying MOTO for $12B is good management? Motorola hasn't really produced anything of value since acquisition for Google aside from the patent pool.

$XXM is a drop in the bucket for Apple - they could fund 10x that without blinking if the patents were deemed to be worth it. They have 10000x that in the bank already.

cjensen2• 14 years ago

Google bought MOTO for the patents. Major portfolios like Motorola's have been going for a lot of money lately. So while I think it was a poor investment, it really depends on whether or not that huge portfolio is useful to Google.

Color has nothing comparable.

jimboyoungblood• 14 years ago

Not to be confused with "Apple acquires Silicon Color"

http://appleinsider.com/article/?id=2147

powera• 14 years ago

October 16, 2006 (article date) is also not to be confused with October 16, 2012.

clobber• 14 years ago

Post from Gruber today about Color: http://daringfireball.net/linked/2012/10/17/color-shut-down

> Like I Said, $41 Million Down the Toilet

raganwald2• 14 years ago

To be fair, the whole quote was:

> This thing looks like a turd to me. Now, maybe I’m the idiot and the joke’s on me and Color is going to be a huge hit. But my figurative money says that the investors who funded these guys just flushed $41 million in literal money down the toilet.

So the first half of his prediction was correct, color the product was a turd. Actually, a double-turd since their pivot seemed to change the product from manure to guano.

He simply didn't predict what may be a seller's market for strategic patents and their role within it. Which is why he's a journalist and not a VC. His brain isn't devious enough (an neither is mine!).

plinkplonk• 14 years ago

I eagerly await Gruber's 'pivot' on his opinion about Color, if Apple - the company that can do no wrong and is really playing 11 dimensional chess (as per his blog) - really acquired it.

megablast• 14 years ago

Gruber is plenty critical of Apple, look at his analysis of Apple maps. He justifies why they had to do it, but still agrees it is not ready.

jowiar• 14 years ago

IF this is actually true, I can sort of see the fit. Apple is very good at turning pieces into products. Color, clearly, isn't, but may be very good at producing pieces that have value in the proper hands.

I'm throwing this out there to stimulate discussion a bit, and there's a pretty good chance I get downvoted for saying it, but there's an argument to be made that this actually is a success for the patent system. Companies founded on "get a bunch of smart people together and innovate" should be something that we encourage as a society. They create value, and there should be a structure to encourage this to actually happen. I'm not sure that academia should have a monopoly on this sort, and patents are the other current method of doing this.

traughber• 14 years ago

lol!

shmerl• 14 years ago

Looking at the title, I thought for a moment that Apple tried to patent some color %) They did already patent rectangular shapes after all ;)

bowmessage• 14 years ago

Interesting... these guys had a heavy presence at my campus last year (Texas A&M University) but have since been nowhere to be found. I know of no one that uses the app anymore at all, not many people did in the first place.

It should be interesting to see what Apple does with this acquisition.

pbreit3• 14 years ago

Are the sources sure that the rumors don't refer to Silicon Color which was reported yesterday?

jey• 14 years ago

That was on October 16 of 2006, not 2012.

pbreit3• 14 years ago

Oh, crap, my bad!

aresant• 14 years ago

Apple just jumped the shark if this is true.

Bill Nguyen is massively talented at making things work for Bill Nguyen - his prior business bought by Apple for ~$80m, Lala.com, was lackluster at best.

Under Jobs you could kind of, sort of get your head around $80m for essentially a talent acquisition in streaming / digital music which is/was an important revenue stream for AAPL.

But even under Jobs the supposed golden boy, Nguyen, bailed. Taking his vision and some of his best people with him.

So I see this as "Apple makes the same mistake twice" - and if Apple is going to jump into the "social around you, bullshit, blah blah blah" game through this acquisition I am truly sad.

siglesias• 14 years ago

Last I checked iTunes Match, which is the child of the Lala team, is working pretty well.

alanh• 14 years ago

Sarcasm? I’m an iTunes Match user, and while I love the dream, the reality isn’t quite there yet. The experience is pretty choppy, even confusing. (No, I’m not talking about buffering streams.)

rm999• 14 years ago

The acquisition is worth ~0.015% of Apple's marketcap. Maybe Apple has some misguided strategy here - maybe; your argument for this is overly-simple - but the acquisition is so small analyzing the affect on Apple is difficult.

MaxGabriel• 14 years ago

Why was Lala lackluster? Lala was a fantastic alternative to iTunes--full song previewing, effortless syncing with iTunes tracks, and cheaper songs than iTunes.

samstave• 14 years ago

I would say that the point is that there is a seed of tech which apple could acquire and put their army of eng on to make something along the same line of what color originally sought to do; Apple-instagram+facetime...

I would think that this is an exceptional acquisition that apple could make: no more color; a battle on instagram, facetime emulation and build upon the social image cloud idea that color started with...

and they wont be bogged down with colors staff - they will own all that color was, not what egos color is.

tjogin3• 14 years ago

Jumping the shark means to have peaked and now being past ones former glory. But Apple never had any peak or glory as far as social apps go.

My bet is that upcoming Apple products will continue to break previous records; the supposed acquisition of Color notwithstanding. Would you seriously bet against the next Apple product selling like hot cakes, based on this?

grey-area3• 14 years ago

This isn't just about social apps. If this story is true it really doesn't reflect well on Apple's senior management.

Apple will continue to print money in the immediate future, just as Microsoft did in the 00's, but buying a startup which never had a viable product, business plan or assets for an inflated valuation like this is a good sign that Apple has lost direction and focus. Social is not their core competence, and should not be, and even if it was color is the last company they should buy. If color is failing, they could easily poach the best staff after it implodes, rather than buying the shell.

raverbashing• 14 years ago

Came here to write exactly that

This is 'feeding the startup trolls'. Where's the value in Color? Nothing

Maybe that's what Apple can't do properly: acquisitions.

zizee• 14 years ago

bonch your account has been hellbanned. Looking at your comment history it has been for a while.

Update: Just to be clear, I don't mind hellbanning spammers or obvious trolls, but looking at bonch's comment history he/she doesn't seem to be either.

Terretta• 14 years ago

Isn't the point of this type of ban to avoid alerting the presumed troll in question?

I read with showdead, and have noticed we seem to often tell auto dead users about it, which seems to defeat the point. Perhaps I've misunderstood the whole idea.

wilfra• 14 years ago

that's by far worst case of that i've ever seen. is there some way we can report this and have it looked into? he shouldn't be banned, or should at least be given the respect of notification. it's been well over a year of constructive posts from that guy and nobody ever sees them. all from what looks like one snarky comment he made. that's not right.

pooriaazimi2• 14 years ago

It's sad; so many people waste their time commenting here on HN not knowing they're hellbanned: http://www.hnsearch.com/search#request/comments&q=hellba...

brazzy• 14 years ago

Having more money than you know what to do with is a sign that you've pretty much exhausted your growth potential. That's not quite the same as jumping the shark, especially if at that point you're the most valuable company in the world.

The correct thing to do is to start paying out dividends, and Apple has done that. Making a relatively small wild-ass investment vaguely related to their core business is at least a better thing to do with the other surplus money than going into finance or real estate.

rplnt• 14 years ago

I still hate Apple for buying lala.com. "lala" was my generic google search when testing out working Internet connection. "Lala - where music plays" was something that I was used to see... until Apple shut it down.

blzabub2• 14 years ago

Why not an acquihire? Perhaps (pure speculation) Bill Nguyen is brilliant at hiring engineers, masterful at developing new technologies (and their associated patents), but utterly crap at productizing these technologies? Guess who is really good at productizing technologies? Seems like a perfect match, especially if Apple saw their previous acquisition of Lala as a success.

dagw• 14 years ago

Then why not simply make him a job offer? Offer him a decent signing bonus to sell/hand over/wind down his current company plus a salary he can't refuse. Surely that must work out cheaper than buying a company you don't want.

And if he really doesn't want to work for Apple, trying to 'force' him by buying his company doesn't seem like a good long term strategy

andyjsong• 14 years ago

I'm gonna get downloaded, but seriously, fuck this.

robryan• 14 years ago

If true this might actually make it even easier for Nguyen to raise in future. If they have done little right and managed to deliver a return on a $40mil investment.

lawrence• 14 years ago

I would downvote this story if I could. Color operates in a parallel bizarro world that most of us will, thank god, never know. $40M in funding and no users? Check. Three months off to Hawaii as founding CEO? Check. CEO who says he would pivot if he was back in the office? Check. Move along, there's nothing to see here.

k-mcgrady2• 14 years ago

So you would downvote a story because of jealousy? Whatever your opinion on Color it's still an important story and something other Hackers obviously care about. The fact someone can get funded so much money, completely fail, and then get bailed out says a lot about our industry.

cft• 14 years ago

For a modern software developer, news like this mean: focus on Android.

rimantas• 14 years ago

You must have some strange definition of "modern".

radicaldreamer• 14 years ago

Probably a good way to build the next generation of Photo Streams in iOS.

pclark• 14 years ago

I would have liked to see Hacker News applauding Bill Nugyen for landing in such a way if these rumours are true. Colour has a team, with no products nor leadership and they're going to sell for tens of millions of dollars. To the most successful company on the planet.

beedogs2• 14 years ago

well, it's frankly kind of embarrassing.

etfb• 14 years ago

My gods I hate "said to". Headline-writer "English" deserves to be consigned to the same cess pit as Church Latin and segmented memory addressing.

madaxe2• 14 years ago

Oh good. Another failed startup with massive over investment, a sucky product and no revenue gets bought for megabucks. Nepotism and back-room deals abound.

jdevonport• 14 years ago

If Apple has done this it would make me really consider their management's judgement.

Color has never been a successful business or even an innovator in its space.

From what I can tell they never even considered how to monetize the company, on that basis it should be allowed to go bust.

I can't see what value there is there apart from the team, and that isn't worth a blockbuster sum.

nicholassmith• 14 years ago

Well if it's true it would go some way towards explaining why Color took a fair few hours after the story broke to say "No, we're not shutting down", if the deal is there it's quite likely they'd need to speak to all sides (board, investors, potential Apple negotiations etc).

If Apple pay $40mil for it then they're as stupid as a sack of rocks. If they've ponied up $10-20mil as a talent grab I can kind of see it. Either way we're talking about pocket change to a company with as much cash reserve as Apple, but if I was an investor I'd be interested in hearing why Apple thought it was a good idea.

Tycho• 14 years ago

It will be interesting to analyse this once we know more.

Previous Apple acquisitions went quiet for a while but then became part of Apples plans in a big way:

Siri, Inc. --> Siri

PA Semi --> A6 chips in Apple devices

Lala --> iTunes Match

I suppose the difference is that they all had viable products prior to acquisition. But what I'm thinking is that Color have been working on stuff which is quite clearly close to Apples photo offerings (cameras in all their devices, photo stream, iCloud, gps, Facebook integration). How much would it cost Apple to develop all that stuff? A few million I guess. But what would the oppurtunity cost be of Apple putting one of their development teams to work on these features? A lot more (judging by how much Apple's profits keep growing).

Apple don't have enough staff to capitalise on all the oppurtunities that they have (hence their massive pile of unspent cash). They can only do so much at once. But what if they find a project basically tailor made to their standards (strategically aligned, patented to the gills, high quality code-base, iOS compatibility)? Might make sense to spend their pocket money and just acquire it for a somewhat inflated price.

jballanc• 14 years ago

Nope, this doesn't smell right...

In fact, this smells like an intentional leak by someone on Color's side in an effort to boost their price to some other potential buyer (counting on Apple's legendary no-comment streak to bolster the appearance of the rumor).

Think about the last time something leaked about an Apple acquisition before the deal was closed...right, never! In fact, Apple has notoriously remained quiet about acquisitions even after they close. They are not a company that does a triumphal sounding press release for every acquisition.

Yeah, occasionally you get leaks about Apple products. You think those aren't intentional? You think Apple's not leaking just enough about their upcoming products to keep people's interest. That's their game.

But leaking information about an acquisition? What does that gain Apple? If Apple really did want to purchase Color, leaking that information would only raise their price. No, the only entity here that benefits from a leak like this is Color.

If the rumor turns out to be true, the fact that details of an acquisition were leaked is much more concerning to me than the particulars of what company and for how much.

salimmadjd• 14 years ago

I'd second your assertions. I've met one of Color's employees(in products team) early on and walked away thinking this company is going nowhere. Not sure what apple is gaining by buying this company. Frankly, they'd been better off buying NIK Software. If they are truly buying Color they're out of their minds.

AznHisoka• 14 years ago

The startup Gods are just messing with our heads.

"Color raises 40 Million" -"OMG.. we're in a bubble" -"Ridiculous... waste of money"

"Color is about to shut down" - "See I told you so" - "Ha.. saw that coming"

"Color acquired by Apple" - "WTH is going on?" - "I work 100 times as hard making a product people want! Where's my payday?!!"

Apple Said to Acquire Color

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