Apple Said to Acquire Color
thenextweb.com
thenextweb.com
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.
I have 15,000 songs in my iTunes library, the vast majority of which are not on Spotify. My 16GB iPhone would normally only hold a fraction of my music but with an iTunes Match subscription I have access to it all.
Also, it gives an off-site back up of every matched song. So tell me, how is iTunes Match similar to Spotify?
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.
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?
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.
You took jumped the shark to mean peaked in profits, I suspect the OP didn't mean it that way as it's normally used to refer to a decline in quality, that's all we disagree on.
This is 'feeding the startup trolls'. Where's the value in Color? Nothing
Maybe that's what Apple can't do properly: acquisitions.
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.
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.
Bad comments get voted down anyway, so there's already a mechanism for that, IMHO hellbanning should really only be used on people trying to post spam repeatedly or repetitively troll comment threads.
1. Log off your HN account.
2. Browse, look for your own posts.
The only reason a hellbanned person can't tell he's been hellbanned is because he's logged on as himself. The reason others can tell is because they aren't logged on as him. The solution is obvious -- log off and visit HN anonymously.
It's quite a brilliant thing. The problem is mods are really abusing it here on HN (you should hallban seasoned trolls. Not someone that trolls once or twice in a year, or worse, someone who isn't even trolling but just said something stupid or out-of-place).
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.
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
(morning) "Color to be shutting down" (afternoon) "Color IS NOT shutting down" (evening) "Color is acquired by Apple"
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)
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.
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.
I remember when they first came out, nobody could figure out how they raised to much capital.
You can replace 'boys' with 'developers' and 'girls' with 'tech socialites'.
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.
They're bailing ASAP. It's a shit-show there (at Color).
=====
"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?"
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.
http://www.slideshare.net/kitseeborg/color-faux-pitch-ddeck
See slide 45: "We're going to flip this bitch like flipper!"
Or did you really think after Slide 2: "Colors: people love that shit" this was a real pitch deck?
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.
$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.
Color has nothing comparable.
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.
"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...
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...
http://technologizer.com/2011/07/29/a-brief-history-of-apple...
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.
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.
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.
"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?!!"
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.
It should be interesting to see what Apple does with this acquisition.
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.
> Like I Said, $41 Million Down the Toilet
> 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!).