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Comment by zoul | Hacker News Reader

I feel like I live in a different universe. Can please someone explain to me what rational thinking might be behind such offers?

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(wild, uneducated guess)

Google is addicted to social because it seems to be the only game in town that can bring in magnitude times more people than a typical product could (e.g. Basecamp)

Color was founded with this power-team of folks that had proven records so when the Hyposaurus came stumbling down the block and Google saw it coming with the potential to snatch up an amazing team with the potential to pull in millions of more users into the Google ecosystem and then direct them not just towards ads, but all their other offerings... it looked like it had every indicator that it would fly.

Unfortunately it looks like some air got let out of the tires and things slowed down considerably for them.

I don't know that I have all the faith in Color staying around, but Path I believe has staying power. They have a really cohesive/directed vision and purpose that they are executing really well.

They may not launch with a billion new accounts a minute, but I think there is so much solid product/story there that once they pass that event horizon, they'll have people pouring into them.

Sort of like a Tumblr or Posterous growth curve -- really focused, really solid products so once people start taking notice, everyone likes what they see.

Just my 2 cents and I used to eat a lot of paint as a kid... so take this all with lots of salt.

First of all take it with a grain of salt. That said, there are at least a couple of ways to look at it:

1) There are reports that Google offered some of its product managers tens of millions of dollars to keep them from joining Twitter. If that's how they're valuing talent, then $200M is in the ballpark for Color's "superstar team" combined with some very interesting IP,

2) Smart investors described Color's technology as breakthrough and potentially "the next Google". Even accounting for some hyperbole, suppose that it really is groundbreaking for reasons that us mere mortals can't fully grok. In that case, adding it to Google's arsenal and combining it with all their other assets (and proven engineering and operations strength) could be a multi-billion-dollar win and a big addition to Google+. Or not, as the case may be; but making a risk/reward tradeoff, it could have looked attractive.

You just reminded me of another "next Google". Cuil.

Not comparing Color to them talent-wise, just saying, you made me smile :)

You do live in a different universe if you think there are hidden patterns of rational thinking behind everything that looks dumb on the surface. There are often hidden patterns of selfishness and incentives, sure, and that's probably true in this case (if the acquisition went through and didn't pay out, who would get fired for it?).

And then sometimes stupid is just stupid. This is Earth.

Remember, Color's real mission was not photo-sharing, but data-mining. Google would pay dearly for a new, innovative way of collecting types of data that they don't have yet.

Anyone can do data mining if they have huge traction. It's getting huge traction that's the problem. I can do data mining if I sold a micro-chip that tracked ppl's movements 24/7.

These deals often faul through at the last minute. Much of the time, the company making the offer just wants to get a look 'under the hood' of a potential competitor.

Think of all the companies google has made these offers to and the deal didn't happen. Strategy at this level is kind of like macroeconomics, it just doesn't map to what makes sense on face value.

The small guy is sort of at a disadvantage if the big company just tries to jerk around. Is there break-up fee as part of the letter of intent?

Depends on the letter.

I'm wondering how it came to be that you typed 'faul.'

It reminds me of the Measure Map acquisition. Launch a new product, then acquire a talented team that worked on something similar. It worked pretty well I believe for Google Analytics.

http://techcrunch.com/2006/02/14/google-buys-measuremap/

There isn't rational thinking behind this. There's a lot of money and a growing fear of becoming irrelevant.

The people running a company like Google don't necessarily have wisdom you don't - see Microsoft, Yahoo! or (especially after dismantling Google Labs) AOL.

This was way before Google+ took off. Likely, the Color team would have been an integral part of their social strategy. With that in mind, a $200M offer isn't unreasonable.

People with cash to burn will do crazy things with it.

There isn't necessarily rational thinking behind it.

It could be a 10-20-30-40 vesting schedule with aggressive earnout.

Is it simply a way to acquire talent?

Bingo. I doubt Google was really interested in Color's business model or app.

I couldn't disagree more. Look at how many people Color's already gone through. Look at how atrocious their apps were (that they were pulled and still are). The only thing they have going for them is the "photos-after-the-fact" experience that others have detailed here. (Go to a concert, come back and see hundreds of photos of the band, maybe even you, etc, without even doing anything)

You couldn't disagree with what? The fact that Google couldn't be interested in the app?

It sounds like you're not too enthusiastic about it either ;)

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