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Google Tried To Buy Color For $200 Million. Color Said No.
- null_para 15y agoSomething must be there in their product that everyone is willing to pay top dollar. And these are all smart people who are ready to pay btw, not any average joe investor
- nkassis 15y agoI too feel like there something there people think has value but the average person doesn't see. But maybe there is nothing and this is really as irrational as it looks.
- param 15y agoAgreed. Either Color has value, or it doesn't.
- jonathanjaeger 15y agoHaha. Like saying I have 50/50 chance to win the lottery. I either win, or I don't.
- hobolobo 15y agoPerhaps a more precise way of saying it is: Either Color has enormous value or it doesn't.
- taylorbuley 15y agoI suspect there might be some pretty heavy use of computer vision as related to those images -- perhaps to pick out brand preference or otherwise personal/private information that could be rolled up/anonymized such that marketers would buy in aggregate.
- arkitaip 15y agoInvestors act irrationally all the time and it doesn't help when their coffers are so overfull with other people's money that $40 million becomes chump change and not even noticeable in the ledger.
- vailripper 15y agoIf the product was released differently, it very likely could have been successful. It seems to me that once they got all that VC funding, they were desperate to release something to prove their worth. But, since their product depends on tons of people all using it in a geographically tight area, it crashed and burned. I think had they started releasing at events (ala twitter @ sxsw), they could have had some success.
- OstiaAntica 15y agoYeah, it could have been a cool thing-- like "This Conference with Color" or at certain trendy clubs. Get some celebs on there too.
- cpeterso 15y ago"SXSW... now in Color" That sounds like a great co-branding opportunity. Color could also sell/host conference services such as preloading conference-related photos/ads or providing additional Color photographers to "augment" the conference's Color photos when the app's adoption is still low.
- ntkachov 15y agoI feel like their target market should not have been the US but rather Europe or Japan. Both much higher population densities where location/presence based technology does much better (see 3DS Street pass feature).
- MatthewPhillips 15y ago3G connections don't work well at large events.
- michaelbuckbee 15y agoThere are always 3 things: idea, team and execution. Color had a genuinely interesting idea: make a social network via implicit information rather than deciding whether or not the a person is a "friend". I can see this being of particular interest to Google as they built themselves on a similar premise: ranking web searches via implicit data (links, etc.) rather than a hand built index. So, with an interesting idea and a strong team they secured both acquisition interest and a huge funding round. The idea being that they would release a series of applications and products that would deliver on the promise of implicit social network creation. Then their PR got ahead of them (no doubt purchased with a chunk of the $41 mil) and expectations got built to a level that could never be delivered on with the first iteration of their first product - an iPhone photo app. So, now there is a big backlash as people feel "duped" by the gap between the hype and the product and it is crushing the company.
- r00fus 15y agoWhen they didn't show up to SXSW which would have been perfect to demonstrate their app, they already failed. Google wasn't paying for execution, so $200M might have been worth the talent (and perhaps the idea).
- slackerIII 15y agoI guess that explains the valuation.
- lazy_nerd 15y agoDid Google dupe Sequoia and other VCs into thinking that Color was actually worth investing $40million dollar into even though eventually when they launched it turned out to be vaporware?
- 9ec4c12949a4f3 15y agoWith that $200M they might afford to buy a vowel, specifically a U.
- zoul 15y agoI feel like I live in a different universe. Can please someone explain to me what rational thinking might be behind such offers?
- rudiger 15y agoThis 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.
- ziadbc 15y agoThese 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.
- clobber 15y agoMaybe this just looked like a good idea to Google at the time. Sometimes you have to make acquisitions to look progressive to your shareholders. Now, I'm betting they're glad they didn't make this purchase. Look at Google Ventures and you might see some questional investments as well: http://www.googleventures.com/portfolio.html http://www.googleventures.com/portfolio.html
- acrum 15y ago(Sorry-- Off-topic) HN Powers That Be: How did this get submitted twice? The URL is the same as far as I can tell... except a trailing slash? (see: http://news.ycombinator.com/item?id=2790700 http://news.ycombinator.com/item?id=2790700)
- mestudent 15y agoAnd that trailing slash is exactly how it didn't get caught by the dupe filter.
- suneliot 15y ago$200 million. For the domain! At the rate the value of that domain was rocketing, seems like a decent investment at the time. Too bad no one's going to want to be associated with it after what team Color did to itself.
- Sayter 15y ago$200 million for a domain as an investment? Only one domain has ever sold for more than $10 million. You get below the $1 million range before you're even out of the top hundred. Domains are not as valuable as people think they are, and the rules change entirely once the new TLD system hits. For the record: Color.com was purchased for $350,000
- tgood 15y agoUltimately the most expensive domain ever was broadcast.com, to just be forwarded now...
- parfe 15y agoIs this just pure greed? Did Color think they had a billion dollar idea? From my understanding they're a public photo album. What revenue source did they target?
- jsavimbi 15y agoPeople looking at your photo album.* *educated guess.
- j79 15y agoThe same revenue source all "social" sites target: You. Okay, maybe not "YOU" you, but the end user. A public photo album where you provide who you are (via registration) and WHERE you are? Real-time targeted ads would be just the tip of the iceberg!
- bonch 15y agoThe same revenue source Google was interested in when they made the offer--your personal data for purposes of context-sensitive advertising.
- jsherry 15y agoTMZ is to Lindsay Lohan as TechCrunch is to Color. Constantly reporting upon (and clearly enjoying) the precipitous demise.
- rdl 15y agoRemember Microsoft offering to buy Yahoo for $45 billion back in 2008? It is worth about $18 billion now (less, actually, especially if alipay goes badly)
- rudiger 15y agoWell, an acquisition would have to be for a premium of Yahoo's publicly-traded market capitalization, so it's tough to say how much they "lost" by scuttling the deal.
- rdl 15y agoAnd there's always the counterexample of Larry + Sergey wanting to sell to Yahoo back in the day for $1mm, and Mark Zuckerberg turning down $1b from Yahoo later. (I sense a theme here...)
- hamner 15y agoA lot of the comments below are criticizing "irrational investors" that were "duped" or the product as "vaporware." This is not the case. Color had a very talented team attempting to attack multiple technically challenging problems, that remain unsolved today. The first is the discovery of your implicit social network, as defined by your virtual and real-world interactions with others. Facebook currently uses this to determine what information is shown in your News Feed and make friend recommendations, but is not using it to its potential. Google Buzz tried to do this directly via your emails and flopped partly since it did not account for the privacy implications. The ability to transform people's natural interactions into strong recommendations of what they should pay attention to and who should meet each other is still an open problem. The second is the mapping of real-world events (initially defined by the pictures and people) onto the virtual world. There is potentially a lot of value, both to participants and outsiders, to say (1) who came to real world events, (2) how they interacted, and (3) what happened, while properly dealing with the corresponding ethical implications. For both of these to work, Color needed a viral social product to gain data and users. They failed on product/market side, especially because they did not have enough focus on "what is the experience we want our users to have the first time they launch the application?" The opportunity remains open, for Color to redeem itself, for the big players to improve their products, or for a new startup to come along and show the world how it's done.
- neilc 15y agoColor had a very talented team attempting to attack multiple technically challenging problems, that remain unsolved today. Sure -- so what? Just because you've got some smart folks trying to solve hard problems doesn't mean you're worth $200 million.
- frossie 15y agoFor both of these to work, Color needed a viral social product to gain data and users. I don't disagree with your analysis, but surely one surefire way to gain social network data is to be bought by someone who has the data already. Google has a pretty good idea who a gmail user's social network is, as evidenced by the Google Plus suggestions.
- trotsky 15y agoNobody pays $200MM for nothing. It's exceedingly hard to believe google valued a small pre-funding startup at over low eight figures. While most of the time I look at tech crunch leaks and believe they're real albeit spin infused, this just doesn't pass the wtf test. Arrington has appeared to have a grudge against color in the past based on the tone of the TC coverage. I'm inclined to believe this is entirely made up. This is why you don't want to get your news and journalism from the people who are also financing deals. Now I'm not sure when to trust them at all.
- vnchr 15y ago-->"It's exceedingly hard to believe google valued a small pre-funding startup at over low eight figures." But Sequoia did when they made the $40mm investment. That's what's so odd about it.
- trevelyan 15y agoThis "de-bubbles" Color in my mind. Not crazy to get a high valuation when you have Google interested in buying you for significantly more.
- vnchr 15y agoMaybe I'm missing something, but I'd chalk it up to 2 groups with deep, deep pockets making a long shot bet because they can. Once Sequoia invested, the acquisition was derisked for someone like Google. Then Google just needed to offer a price of some multiple of the investment ("How about 5x? Not bad for 6 months!"). Conversely, Sequoia might have hoped for a flip knowing Google was so aggressive for social startups at the time and invested accordingly. As far as I can tell, the Color leadership were blinded by their own genius and these early "signals" of success and they screwed up their acquisition, launch, and thus far all meaningful execution.
- natural219 15y agoI might be the only person in the universe who thinks Color is a fantastic idea, but not because it's trying to be an uber-cool new social network. Location-based photo sharing is an incredible idea. When I'm at an event -- say, a concert -- there are hundreds of people around me taking lots of different pictures. I want those pictures, but I don't know any of those people. Imagine going to a venue, not bringing a camera, but still coming away with awesome, memorable photos of the band, from people that have nice equipment and know how to take photographs. I'm not sure it justifies the huge valuation, but I can easily see why this product had the potential to be a huge player in the photo-sharing space. I feel like the press from their first round caused such an unnecessary uproar around their brand that coming back and producing a humble, useful app was nearly impossible. That said, I probably would have taken a $200 mil payoff for an idea for an iPhone app.
- angryasian 15y agoI agree to an extent, its not the idea of capturing a location as so much a collective at a specific moment in time. Example: Yelp/Gowalla collect pictures of food and venues and really it doesn't matter so much when they were taken. Color is cashing in on capturing moments in time that are relevant to a group of related or unrelated people, but the real question is how often is this relevant and even for times that are relevant, as a fleeting moment, will 90% of the pictures provided even matter to a user. I can tell you honestly I get bored after looking at the first few pictures of random people I care nothing about.
- arepb 15y agoThe time axis on this is the most interesting part, but as you point out the reality is for most things people don't care. On the other hand, I can't wait until Google releases their timeline-based photos on top of Google streetview. It will be a browsable history of earth, geolocated.
- funkah 15y agoThat's what I figured as well, but the execution was too confusing as it turns out.
- joshu 15y agoi feel like HN is fascinated by but has relatively little understanding of how deals work. companies don't just show up on your doorstep with an acquisition offer and a giant check. many times the deals are staged and dependent on progress. consider google's acquisition of dMarc, the talked about price, and the actual price.
- neilk 15y agoI'd love to read more about this... what the average person thinks versus the reality of a deal.
- techiferous 15y agoDitto. Someone please blog about this and post to HN!
- ojbyrne 15y agoI think HN is much better than TechCrunch/Mashable/etc in that regard. The big tech blogs seem to have a vested interest in promoting the idea of huge acquisitions. People here seem genuinely interested in the details and the detailed outcomes.
- joshu 15y agoI dunno. It feels like a lot of the comments are either angry/chip on shoulder/etc or are presenting opinions as fact for puffery. Hardly any better. There's not even a glimmer of doubt in anyone's mind that the reporting might be incorrect, etc.
- jarek 15y agoHN thinking TC might not be perfectly right every time? Why I never! - Still bitter about the TC/Last.fm/U2 story
- josefresco 15y agoWe use the the article as the basis for the debate here. Sometimes that debate stays on topic, sometimes it does not. For the sake of timeliness we mostly have to assume the article is accurate, however sometimes the debate itself is regarding the authenticity of the publisher, author or sources (or lack thereof). The HN system is quite healthy IMHO
- pclark 15y agoI think that Color is an incredible idea for an application, and when I read their pitch I wanted to bang my head on the desk for not coming up with that concept because it is so beautifully simple yet obvious yet useful! Isn't it obvious that if you are at an event, say, a birthday party, you'd want to see what photographs your friends are taking as they take them? What about at a sports game or concert, can you imagine how amazing that'd be? Raising $41M, selling for $200M, all irrelevant versus the grand scheme of this idea. I worry that they have this awesome idea, and are poor at actually building the product, and this makes me sad because I really want someone to do it right. I really do not understand the hate at Color, they have made mis-steps, but their concept is actually a good idea - compared to a lot of stuff that Hacker News thinks is dumb.
- seunosewa 15y agoDoesn't Facebook solve this problem already?
- pclark 15y agono, not at all. Facebook exacerbates this problem if anything.
- jrmg 15y agoIsn't it obvious that if you are at an event, say, a birthday party, you'd want to see what photographs your friends are taking as they take them? What about at a sports game or concert[...]? For most people, at least, it's not, because why would you be looking at your phone rather than the event that's actually going on, at full scale, around you? It would perhaps be good to see the photos others took of the event afterwards, when reminiscing.
- njloof 15y ago$200 million isn't cool. You know what's cool? Uh, $0 million.
- csomar 15y agoI didn't try the iPhone application, but it has 1411 ratings with 2 stars. How is this a good idea if people don't actually like it?
- kristofferR 15y agoThe idea was good, it was just the execution that was bad. The app itself was really buggy and the proximity-limit for near photoes was way too limited. Even in tech centers like SF it was empty. http://cinch.fm/scobleizer/194769 http://cinch.fm/scobleizer/194769
- badclient 15y agoMore likely: Google offered a few bucks for Color and millions if they met milestones 1, 2, 3...; Color knew they couldn't so they turned it down.
- jonathanjaeger 15y agoGood point. $200 million in cash or stock and how many milestones you have to hit are significant factors.
- ristretto 15y agoI agree with most here that it's a good idea, but it's been out for months, so maybe this idea was another dime in a dozen. I guess Google has lots of cash to spare on a domain name and a hype machine.
- agscala 15y agoColor's service would be a killer feature for Google+. Color is an excellent idea assuming that there are users who are willing to post pictures and share location data. Unfortunately for Color, it will be a long hard road to get these users. Google, on the other hand, already has a ton of users, the beginning of a social network, and a really strong presence in the phone market. If Color-like functionality was built into Android, Google would find themselves with a very valuable service right from the get-go. A lot of the hard work is behind them.
- nextparadigms 15y agoIn Groupon's case ($6 bn offer), Twitter's case ($10 bn offer) and now Color, I feel as if Google got lucky those companies didn't want to sell, because it seems they would've been a huge waste of money. Google seems to be pretty happy about over-spending on these companies, but is extremely cautious about over-spending for patents that could save Android in the long term.
- megablast 15y agoI guess that with the patent issue, Google evaluated the fact that it will be cheaper to fight them, using lobbying, and licensing, than to pay that much for them.
- ycombiefan 15y agotoo many startups are not solving any real-world problems. that's why they are going to flop.
- SeoxyS 15y agoFor me, the brilliant idea behind Color, (which they did absolutely not realize in their app), is the idea of an elastic social network. In real like, friendship isn't binary. It's a scale of how close we are, what we talk about, what we share in common, etc. If you came up with a social network that would figure out who your friends are based on how often you talked, hung out, what you talked about etc., I'd call you a genius. A social network where there's no awkward friend requests to accept or reject. A social network that shows me feed items based on how much I currently care about the person and the kind of content...
- calbear81 15y agoAbsolutely, I think this is exactly the BIG idea that the VCs saw that others didn't really get. I would add that I don't even think it's about "friends" in your elastic social network, it is that the social network exists based on the context (where you are, who you're with, what you're doing) regardless of whether the other person knows/friends you or not. There is a shared thread that is tied together by a shared experience and Color was trying to capture that.
- deleted 15y ago[deleted]
- localhost3000 15y agoi keep reading in the press that color had a "superstar" team and this was a main driver of the massive funding. Yet, I've never seen an explanation - why are (were?) these guys generally considered "superstars" ?
- arihant 15y agoColor's elastic network would be if only here were more people in it. I think they suffer with a massive chicken and egg problem. I hope they figure things out. I am yet to use Color with another person in the same room. I think Google is after their sound technology.
- pinaceae 15y agoas an outsider, i don't understand the allure behind color at all. elastic social network? is this something a 16 year really thinks when using facebook? oh i wish it was more elastic? sounds like nerdvana. proximity photo sharing? why would i want to do that? i am careful about which pics i share with the world. they transmit my persona, so i don't share shots that suck. or maybe i am taking pics no one else is supposed to look at - as in private. why would you want to look at my kids, perv? honestly, not all ideas by talented and bright people are good. just look at asana, yet another project tool.
- mkramlich 15y agoI have a few rules in life. Somewhere pretty high up there is, "Never turn down a buyout offer for $200 million."
- corry 15y agoIf the average employee of Color didn't already know this... wow, talk about an upsetting topic. Imagine doing the math on your options, seeing that you could have made a killing, then thinking about how the founders said 'no' to the deal, then thinking about how some of the guys who made that choice jumped ship... it all would make for some bad morale.
- moheeb 15y agoWouldn't Color be the worst copyright/privacy infringer ever created unless they setup some system to blackout certain areas? Sounds like a nightmare. What happens when Tool and Madonna don't want photos at their venue? http://asmp.org/tutorials/property-and-model-releases.html http://asmp.org/tutorials/property-and-model-releases.html
- SODaniel 15y ago$200 million for a start up excluding hard patents is almost always a clear sale. Yeah, it's a good idea but not by any means something completely revolutionizing.