Friday, October 19, 2012

Apple Inc. (NASDAQ:AAPL): What Is Really Happening With Color?

It is natural to get confused by the swirl of stories associated with social video startup Color in the past 24 years.

First, an internal memo had leaked that said that the company was winding down. Then AllThingsD was told that Color was not closing down and that some people at the company had no clue about where the memo came from. Then, Color was being purchased by Apple Inc.(NASDAQ:AAPL) in lieu of a high value.

Among all kinds of speculations, what really was happening went something like this. 20 people made up the engineering team of Color. They comprised almost the entire company. It is being ‘acqhired’ by Apple at a ‘nominal’ price, as per several sources, which are familiar with both sides of the situation. There are no double-digit millions involved in the deal, just to be precise.

Apple is not acquiring technology of Color, its domain names, liabilities and intellectual property. Those are being left with the company. So, around $25 million cash will stay in the bank.

Apple and Color has refused to comment on this matter. CEO of Color, Bill Nguyen did not respond immediately about a query about the acquisition of talent.

There appears to be more bad blood than alliance among employees of Color, former employees of Color, investors of Color and Apple. That is the reason why there have been so many conflicting stories.

Color had started as a social discovery product with $41 million in funding from Bain Capital and Sequoia Capital. It then pivoted to a silent video app connected to Apple. Color has recently grabbed a deal with Verizon to dole out a live video app on Android phones that launched in May and showed early signs of doing well.

Sources say that Color engineering team will probably work on cloud technology at Apple. 

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