Business, Economics and Jobs

Apple poised to buy Silicon Valley's biggest recent flop


Bill Nguyen, founder of the technology startup Color, stands at their headquaters on March 21, 2011 in California. Although the company was a financial failure, its innovative patents likely motivated Apple's decision to purchase the startup.


Kimihiro Oshino

Apple is reportedly going to buy Color Labs, a startup that raised $41 million before launch and then totally flopped.

The Next Web, which is reporting the news, says the price in "the high double digit millions" – which sounds like $50 million+ to us.

Color launched in March 2011 to incredible hype, thanks mostly to its huge round of funding and it's CEO: startup veteran Bill Nguyen.

The vision for Color was big. Using geo-positioned crowd-sourced photos, Nguyen and company were going to build a virtual world to mirror our own, live.

Unfortunately, in terms of actual user adoption, the app went nowhere.

A few months in, Nguyen scrapped the idea. 

Next, Color became an iPhone app for taking short video clips and uploading them as "status updates" on to Facebook.

This idea also did not gain traction with actual users.

Finally, over this past summer, Nguyen stepped down.

So why does Apple want to bail out Nguyen and his investors?

The Next Web speculates the reason Apple wants to buy Color is its patents:

Color said that it had six patents pending at the time of its funding, including its ‘elastic’ social
graph and patents related to GPS location and battery saving. iOS developer DanielJalkut uncovered several patent applications that Color has filed for in the last couple of months that have names like “sharing content among a group of devices” and “user device group formation”.

All of those patents reference a provisional application filed back in March of 2012 on the multiple device method. It’s not much of a stretch to say these patents could be applied to Apple’s Photo Stream feature in iOS 6.

Maybe that's it. Or maybe it's that Color has hard-to-find, talented engineers and Apple doesn't mind spending a microscopic percentage of its huge cash pile to get them.

Also, Apple’s Senior Vice President Internet Software and Services Eddy Cue is said to be close with Nguyen.

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