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Google Tried To Buy Path For $100+ Million. Path Said No.
- benologist 16y ago"they loved the team" That's a lot of love.
- jewgonewild 16y ago100M for path? Talk about highly inflated valuations. We are clearly in Tulip Mania times.
- whakojacko 16y agoTo be fair, they raised funding at more modest (but still crazy, depending on perspective) 25m pre according to the article. Seems like Google is just looking for ways to spend their cash.
- deleted 16y ago[deleted]
- daveambrose 16y agoOpen question: is there any material valuation to the business (and operations) besides the team in a story like this?
- btmorex 16y agoWow. He screwed over his cofounder(s).
- bmcmanus 16y agoAs easy as that is to say, this isn't a get-bought-and-get-paid company; it's a shake-up-the-world company. I'm sure he and his co-founders discussed that at length and understand it. And ultimately, if you have a remarkable team with strong financial backing, isn't that the type of company you really want to work for?
- jaredmck 16y agohow exactly is it going to shake up the world? I see the best case as more of a mild rattling of the world- a more human social networking, which will either softly nudge people in this direction, move other networking players closer to the real-world social model, or be a sort of nice subtle tool in the mobile social web. In no way is it something that as currently formed has a really big dollar exit potential- i mean, ideally, the product will never become very valuable to advertisers. If they monetize some other way which can scale big, then they're way smarter than I can imagine, but i don't see the data aggregation model or traditional ad model working with this product...it's a very techie-oriented app at this point in time. The benefits are not visible at all to "normals", and there is no business use case like twitter/FB have to accelerate adoption as a platform. The world has no idea Path exists yet, so there is a while to go before anything is going to be shaken up at least outside of the bay area.
- brown9-2 16y agoI'm sure he and his co-founders discussed that at length and understand it. Well, from the article: The decision to turn Google down was not unanimous, according to sources, and may have become what some people are describing as "extremely contentious." So what is your speculation about what they discussed or agreed on based on?
- geekfactor 16y agoIt's possible, maybe even likely, that the founders talked it over with Kleiner and Index and the VCs allowed them to cash out a bit.
- olivercameron 16y agoIf by screwed, you mean owning a very good percentage of a company valued at $25m.
- samwise 16y agoThat's an insane offer for such a young company. I guess the team turned it down in the hopes Path will be many times the offer. I just don't see how an iPhone app can worth more than $120 million. I think the most successful app would be angry birds, but i doubt even the most optimistic valuation would put them over one billion.
- olivercameron 16y agoAngry Birds, in a sane world, should be worth no where near one billion. They have sold less than 100 million copies, and I doubt they can keep on repeating their success year after year. It's a fad that will soon be replaced, just like Doodle Jump and Flight Control before it.
- kmfrk 16y agoI don't know. I don't think Angry Birds is an interesting game, but it's obviously blowing up like mad, so I don't pretend that any rational dictum will predict that it dies down. You don't see plushies and fan art for the other games - and you shouldn't ignore all the ways the creators profit from the franchise. They also make a bunch of themed releases like Halloween. They may also have hit a tweenage demographic susceptible to crap like Silly Bandz, Bratz, and other inane ztuff. They even have an ad ready for Superbowl(!).
- imajes 16y agoYou've missed the point. Sure, it's 'blowing up like mad' but the important thing is that Roxio have been able to turn the Angry Birds game into a brand: selling movie rights (!) something even EA struggle with, so quickly, getting a deal with FOX for marketing and developing a range of real-world merch to go along. All on the back of one simple little app that looks and feels like a flash game. (i love it, don't get me wrong, but it is not anything special) Did Harbor Master or Flight Control do this? No. It takes a lot to think big and that's where the big players are-- and worth a good chunk of money too.
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- vnchr 16y agoAny thoughtful speculation about why they said no? It seems to me more like a personal vendetta response from a Facebook-faithful (i.e. anti-Google) than justified by economical reason. A niche social network platform acquired for $100MM? That's outlandish enough. I can't imagine their value exceeding that later on.
- reynolds 16y agoIt's interesting to me that they turned down a $100M+ offer and raised at only a $25M pre-money valuation. Wouldn't it make more sense to raise at close to $100M pre-money?
- kareemm 16y agoNot if they anticipated raising more money later. Raising at $100M means they were setting themselves up for a down-round when they next raised (i.e. raising at less than $100M). Unless they're extremely confident that they'd be valued at more than $100M in their next financing round, raising at less than $100M sounds like the smart, um, path.
- kmfrk 16y agoBut isn't this problematic, since they would have to raise more money later on, considering that they'll be diluting their shares a lot. Doing a $5M seed round at a $25M valuation after Google's offer is, what, a dilution of 20% total shares? I get that they can't do an evaluation that is higher than the next one, but they must really have recented taking the offer - perhaps for reasons of working at Google for four years for the $25M bonus.
- whakojacko 16y agoMaybe because nobody else except Google values them at $100M?
- sfphotoarts 16y agowhat a bad name, it's hard to even search for them. Turning down $100m was insanity, and the friction between co-founders will very likely fester and be terminal for them.
- johnrob 16y agoThere are very few examples of companies turning down large offers and subsequently regretting it. There has to be something pretty good going on to get an offer like that.
- sfphotoarts 16y agoI worked for one, Pointcast
- portman 16y agoI can think of no other Internet company that was so far (a decade?) ahead of its time. I loved that damn product so much. This has nothing to do with the thread, but I just want you to know that you had at least one rabid fan from 1994 - 1998.
- sfphotoarts 16y agothank you - it was a good product, but sadly the company melted down, took something that worked and decided to spend a year re-writing it in COM; meanwhile portal sits like Yahoo! came along and eat their lunch. A disastrous CEO that turned down a huge exit opportunity was replaced with an equally disastrous one that spent most of his time worrying about what particular rain forest he wanted chopped down to have this desk made from.
- lsc 16y agofor a much larger example, see Microsoft flirting with Yahoo before they bought out bing. It will be rather a long time before Yahoo is again worth as much as Microsoft was willing to pay.
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- thankuz 16y agoMaybe going the Groupon route? Or, trying to. It's hard to know whether or not they know things that the general public and Google doesn't, or that Google knows something we don't. Interested to see how this pans out on both sides and the industry's reactions along the way! Thanks for all the comments.
- Supermighty 16y agoI wonder how well the suited to each other the founders thought they were when they started out. I'm willing to bet they didn't talk about, or at least see eye to eye on the endgame.
- Supermighty 16y agoSidebar: The only way to update your own path is with an iOS4 only app? It can't even be done through the website? This just seems wrong to me. I know they must be working on an Android version as they are hiring for that position, but still not being able to update through the web interface seems silly.
- melvinram 16y agoThis is Madness! THIS IS SILICON VALLEYYY!!! http://www.youtube.com/watch?v=-qR0Uke2XNI http://www.youtube.com/watch?v=-qR0Uke2XNI I find it interesting that Google would be willing to pay $100M for "the team’s “design skills,” and were very enthusiastic to get a prominent ex-Facebooker, Morin, at Google. They hoped it might help Google recruit more Facebook employees over time." They've taken a big gamble by not selling at $100mil, which seems very generous. It'll be interesting to see where they end up in 5 years.
- xtacy 16y agoAre they looking to be bought by Facebook instead?
- jasontan 16y agoTime for a new startup: Path-on. Social sharing of pictures of coupons. Mobile x realtime x commerce. Already valued at $2B. Who's with me?
- thankuz 16y agoI'm in! But, it wouldn't be complete w/o social Q&A - maybe Quopath-on?
- dmitrypakhomkin 16y agoWow that's a great idea.
- zone2 16y agolove this.
- issaco 16y agoHow about this one : Faceless. Social sharing of pictures of your possessions and favorite things that are guaranteed by face recognition not to contain people in them. Find and meet new people by interest, taste.
- deleted 16y ago[deleted]
- geoffc 16y agoInteresting metrics on the growth and engagement rate. FWIW, I am seeing similar metrics at my group texting site (groupflier.com), a 15% engagement rate and linear group growth. I wonder if that is the natural growth rate of closed groups?
- danielayele 16y agoHow did they burn through $2.5mm that quickly?
- defen 16y agoI wonder if Google is worried (or should be worried) about these recent high-profile rejections of its very generous acquisition offers? Yelp, Groupon, Path, etc.
- lotusleaf1987 16y agoAre there any companies who also turned down offers from Google? The three you mentioned are the only ones I can think of.
- pjhyett 16y agoGiven the app isn't particularly popular or compelling, I'm a bit incredulous over the fact that you only need a couple of internet-famous co-founders to warrant a $100MM offer.
- johnrob 16y agoI won't conclude that there wasn't more to offer than just internet fame, but I will say that brand is something that companies will pay a big premium for.
- rst 16y agoPerhaps, but Google hasn't been one of those companies, Google Earth and Google Analytics are both things they acquired --- and immediately rebranded. (Originally Keyhole and Urchin respectively.) In any case, I'm not sure Path has yet established enough of a brand to be worth that kind of premium.
- ryanglasgow 16y agoThey acquired and kept the names for Android, Dodgeball, and Picasa. Google Path has a nice ring to it and would integrate well within their current product lineup.
- phlux 16y agohow's that working out for Kevin Rose these day?s?
- bpeters 16y agoMoney flows like wine in the valley.
- phlux 16y agoAnd as we all know, wine eventually turns to piss - and a bunch of stupid stupid txting decisions.
- yumraj 16y agoI think they're waiting for an offer from the mothership, AKA Facebook.
- rokhayakebe 16y agoGreat decision, Path. $100M is not cool. You know what is cool? $1 Billion.
- kmfrk 16y agoMust be Aaron Sorkin's compelling writing that influenced the decision.
- staunch 16y agoWhy wait to see if it's worth a billion when you can hedge it at 10% today?
- brown9-2 16y agoOffers like this really reinforce the conventional wisdom that your best bet to make it big is to strike out on your own, build something that a big company would like to get into and then sell it to them. No employee pushing a social network idea or design proposals within Google is going to get compensation anything like this.
- zackattack 16y agoThis discussion is lame because it has no context. Here's what I know. Dave's already independently wealthy. His girlfriend is something of a big deal at Google. He killed it for Facebook spearheading the Facebook Platform. Google is losing at social and it really cares about it.
- brown9-2 16y agoI think that's what most of the discussion is actually centering on, but without really saying it - "losing at social and it really cares about it" is starting to translate into moves that seem quite extreme and seem to have less to do with rationality than M&A fever.
- vhackish 16y agoWow. And I thought groupon turning down 6bil was crazy ... Back in the mid 80s companies would have killed for money like this!
- portman 16y ago"eventually offering $100 million for the company plus an earnout of $25 million to be paid over four years" Terms, terms, TERMS people. I can't believe that with 40+ comments there isn't more discussion of the terms. It could have been $100M in Google stock on a 4-year vest, plus $25M cash on a 4-year earn-out. At those terms, it's really only a $25M deal if the founding team doesn't think they're going to sit around at Google for 4+ years. Basically, the one sentence above tells us very little about this purported offer and the reasoning for turning it down. I would wait a week for more details to emerge before jumping to any conclusions about bubbles, co-founder betrayal, or anything else.
- austinB 16y agoThat is a very good point. The article gives no detailed term information other than the big looking number, $100 million. A sum that could come in any number of terms with most being worth significantly less then were it cash. I will say Dave Morin seems to have made some good calls in his day.
- sfphotoarts 16y agowhy would the founding team leave with $75m worth of Google stock on the table, all they have to do is show up for three more years. Given a choice between a nice job at Google with a multi-million dollar salary doing the thing you love with the resources and infrastructure of Google behind you vs going it alone, the choice seems (no matter what the terms) like a poor one. It's not like Path have any really ground breaking technology. How defensible really is the idea?
- Timothee 16y agoKeep in mind that two of the co-founders are Dave Morin and Shawn Fanning. The former likely made many millions (real and paper money I'd think) as manager for the Facebook platform/Facebook Connect, the latter made many millions from Napster. So, even though this offer and this decision both leave me a bit shocked, they already have the nice job and the resources they want. (office close to the bay, downtown San Francisco/SoMA is also nicer than the drive down to Mountain View)
- CoachRufus87 16y agoHey Google, take that 100+ Million and start your own YC of sorts.
- marknadal 16y agoPath's name itself reveals the nature of their choice. Getting bought out is the end of their startup story, the conclusion of their "path". While the choice is apparently absurd, it at least stays true to their company's core values. The sad observation is that Path simply isn't a valuable enough product to create a great story unless they undergo massive pivots. So it begs the question as to the motive, is this anything more than a silicon valley ego contest? Parker was fictionalized in The Social Network, Fanning wasn't. Perhaps the purpose of the choice is to put themselves on a path to fame by creating not a groundbreaking product but a breath taking story, the path they blaze.
- jgervin 16y agoWhy would you turn down $100+ million? I honestly am not sure where Path is headed. I am at loss for words on this one... Google must see something?