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.
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.)
iTunes Match would have been the best thing I ever used had it come out one (or more) years earlier. Instead, it arrived after I had already tried Spotify, and by then I had tried something better.
That link explains a mode by which Spotify's cloud based music can be available offline. iTunes Match gives access to YOUR OWN music via the cloud. Do you not see the difference?
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?
Count one more person in that minority..my iTunes match experience has been pretty bad.
My songs randomly get grayed out, and if a song has not already been downloaded to a device I own, I'm never sure if it will play or not.
Agreed, the quality of iTunes Match is subpar. The music is slow to load, doesn't sync correctly, is difficult to delete, and is really jittery. I've since tried Pandora One, Grooveshark Pro, and Spotify Premium. By far, I've had the best experience with Spotify. (iPhone 4)
I agree - the service is great, but the client apps are not. In particular, if you have a lot of songs, the iPod app can get really slow and confused (things have improved a bit in iOS 6, but it still crashes on me occasionally, especially when shifting between networks)
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?
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.
Nothing Apple has ever done in the social context has ever reflected well on Apple's senior management. They survived Ping, they'll survive this. And it won't be a nailbiter. Wanna bet?
I'm sure they'll survive, and yes they don't have a good record on social and cloud stuff from mobile me to ping. But jumped the shark doesn't mean they'll go out of business this year or this decade, it just means they're at the start of a long slow decline in quality and are out of ideas - that won't stop them making lots of money though, in fact whether they make money and survive is not really related to whether they have 'jumped the shark'.
So, whether they continue to break sales records and revenue and profit, or not, you are right either way? It's just a matter if you are really right, or tremendously right?
I wasn't aware this was a points scoring exercise, frankly, who cares if I'm right? I was just pointing out that the original post was not related to Apple's financial performance, but was criticising their lack of direction and quality lately - those have a long lead time in relation to profits - they can coast for a very long time now on the reputation they have built up, and the loyal customers they have (just as MS has for the last decade).
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.
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.
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.
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).
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.
A lot of HN users find the whole concept of hell banning objectionable. Because for a large number of those affected, they're not spammers or trolls, they've just made one comment that has irked an admin. It is our duty as decent human beings to inform them.
Precisely my biggest problem with HN. There needs to be a way to repeal HellBanning, some sort of an appeal mechanism or a time-based auto-repeal that kicks in after say 4 weeks of good behavior such as 25 upvoted (albeit dead) comments from the HBanned user.
Or the admins could just reserve hellbanning for only the most persistent serious trolls. It is a useful tool but should only be used in extreme circumstances, not just for one bad comment. If it was used only once a month or every few months for persistent trolls it wouldn't be a problem.
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.
Yes, when I saw that I could still upvote dead comments, I just assumed this data would be used that way -- otherwise what's the point in being able to do it?
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.
Why was Lala lackluster? Lala was a fantastic alternative to iTunes--full song previewing, effortless syncing with iTunes tracks, and cheaper songs than iTunes.
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.
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.
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.
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.
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
Because of the points I made in my OP: engineers and patents. I'm not saying that Apple wants Bill Nguyen. Based on his leaving Apple last time his company was acquired, maybe they in fact don't want him. They want his engineers and patents, to get them, you have to buy the company. To get rid of him, you have to buy the company.
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."
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.
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'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.
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.
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.
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'.
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.
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.
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.
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.
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.
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?"
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.
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.
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.
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.
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.
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...)
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.
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...)
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.
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.
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?
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 "
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...
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.
I would say they are more high profile than Color. The only reason we think of Color as high profile is because it was a failure. Anyone outside of our bubble will never have heard of it. Siri and Chomp were both successful and had a lot of users. People actually cared when they were shut down. I doubt many people will care if Color gets shut down.
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.
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.
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.
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.
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.
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.
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.
Heh, he is not critical of Apple at all in that piece. He grudingly accepts that the new Maps wasn't ready, but spends the rest of it begging us to forgive them because big mean Google wouldn't give Apple what they wanted for cheap. :(
> 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!).
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.
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.