Rumor Mill: Apple acquiring embattled video sharing startup Color Labs
Apple (NASDAQ:AAPL) reportedly has acquired embattled video-sharing startup Color Labs, which this week denied it is closing its doors.
Citing trusted sources with knowledge of the agreement, The Next Web reports the Apple/Color Labs deal is completed, although the paperwork has not yet been signed. Financial details are unknown, but insiders say the price is in the "high double digits" (i.e., tens of millions).
News of the acquisition follows hours after Color Labs officially denied rumors it is winding down. Founded in 2011 by Bill Nguyen (who previously spearheaded cloud music platform Lala, acquired by Apple for $80 million in 2009, and mobile email firm Seven Networks) and Peter Pham, Color Labs--a Fierce 15 award winner earlier this year--raised $41 million from Sequoia Capital and Bain Capital Ventures prior to launch. In May 2012, the company announced a multi-year agreement with Verizon Wireless (NYSE: VZ) to pre-install its video broadcasting service on some of the operator's Android smartphones.
Consumers have been slow to embrace the Color application, however--metrics firm AppData reported the app sees just 120,000 daily active users and 460,000 monthly active users. In September, Nguyen took a sabbatical from his CEO duties, with sources indicating his relationship with the Color Labs board of directors had grown increasingly strained over the summer months. On Wednesday, VentureBeat reported that shareholders and board members voted last week to wind down the company, a development seemingly confirmed by an email attributed to Color Labs Vice President of Finance Andrew Urushima.
Color Labs quickly denied the report. "Color is not shutting down," a spokesperson told VentureWire. "The partnership with Verizon is very strong, and they have interesting product ideas." A follow-up story from VentureBeat stated the Urushima email was legitimate but incorrect.
The rumored Apple acquisition could explain the level of secrecy and confusion surrounding Color Labs' status. The Next Web adds Nguyen first approached Apple's Senior Vice President Internet Software and Services Eddy Cue about purchasing Color even before his relationship with the board went south. In addition to its video sharing service, Color Labs maintains a patent for recording HD video as well as pending patents related to mobile social networking, GPS location and battery conservation. "It's not much of a stretch to say these patents could be applied to Apple's Photo Stream feature in iOS 6," The Next Web notes.
- read this Next Web article
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