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Google Tried To Buy Color For $200 Million. Color Said No.

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Re: Google Tried To Buy Color For $200 Million. Color Said No.

#11

Post by michaelbuckbee »

null_para wrote: post #2

Something 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

There 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.

Re: Google Tried To Buy Color For $200 Million. Color Said No.

#13

Post by OstiaAntica »

vailripper wrote: post #10
null_para wrote: post #2

Something 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

If 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…

Yeah, it could have been a cool thing-- like "This Conference with Color" or at certain trendy clubs. Get some celebs on there too.

Re: Google Tried To Buy Color For $200 Million. Color Said No.

#14

Post by clobber »

Maybe 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

Re: Google Tried To Buy Color For $200 Million. Color Said No.

#17

Post by ziadbc »

zoul wrote: post #12

I feel like I live in a different universe. Can please someone explain to me what rational thinking might be behind such offers?

These 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.

Re: Google Tried To Buy Color For $200 Million. Color Said No.

#18

Post by ntkachov »

vailripper wrote: post #10
null_para wrote: post #2

Something 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

If 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…

I 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).

Re: Google Tried To Buy Color For $200 Million. Color Said No.

#20

Post by rkalla »

zoul wrote: post #12

I feel like I live in a different universe. Can please someone explain to me what rational thinking might be behind such offers?

(wild, uneducated guess)

Google is addicted to social because it seems to be the only game in town that can bring in magnitude times more people than a typical product could (e.g. Basecamp)

Color was founded with this power-team of folks that had proven records so when the Hyposaurus came stumbling down the block and Google saw it coming with the potential to snatch up an amazing team with the potential to pull in millions of more users into the Google ecosystem and then direct them not just towards ads, but all their other offerings... it looked like it had every indicator that it would fly.

Unfortunately it looks like some air got let out of the tires and things slowed down considerably for them.

I don't know that I have all the faith in Color staying around, but Path I believe has staying power. They have a really cohesive/directed vision and purpose that they are executing really well.

They may not launch with a billion new accounts a minute, but I think there is so much solid product/story there that once they pass that event horizon, they'll have people pouring into them.

Sort of like a Tumblr or Posterous growth curve -- really focused, really solid products so once people start taking notice, everyone likes what they see.

Just my 2 cents and I used to eat a lot of paint as a kid... so take this all with lots of salt.

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