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The sale had been rumored as far back as October 18, and was set to bring relief to investors who had seen the mobile broadcasting social app startup struggling to find a place in the mobile market. The price of the sale was rumored at the time to be in the “high double digits,” but TechCrunch today reports it has confirmed the sale price was around $7 million. That’s far less than the $40 million investors such as venture capital firms Bain Capital Ventures and Sequoia Capital poured into the company.

The lawsuit was brought by Adam Witherspoon, a former Color employee who claims he was intentionally and inexplicably left out of the Apple deal. He is seeking payment for lost wages, lost benefits, and “emotional distress.” Witherspoon and his wife were founding employees at Color, with Witherspoon working IT at the company. He now accuses Color founder Bill Nguyen of a variety of gossipy actions, including calling Witherspoon’s son a “wimp” and unfriending Witherspoon on Facebook.

The lawsuit as a whole is pretty embarrassing. It paints an unflattering, childish picture of Nguyen, Witherspoon, and the overall culture of Color Labs.

Today, though, some good news (or at least a sigh of relief) is coming for Color investors. The Next Web is reporting that Apple, the biggest company in the history of companies, is looking to buy Color for its patents and talent. The report cites unnammed “very well placed” sources as saying Color will be bought for a price in the “high double digits.” The company’s investors, which poured more than $40 million in to the company and include large venture capital firms such as Bain Capital Ventures and Sequoia Capital, are reportedly getting a return on their initial funding.

The Next Web points out that this would not be the first time Apple has bought a company from Color founder Bill Nguyen. Nguyen founded LaLa, a music store and sharing service that Apple acquired in 2009 and promptly shut down.

The deal was announced on the Color blog, where Bill Nguyen, CEO of Color Labs, explained how the deal came about. It started out as a fascination with cutting-edge film technology. From the blog post:

About nine months ago, I discovered RED http://www.red.com a professional digital camera used by filmmakers including Peter Jackson and James Cameron. RED is all about 4K and beyond. That’s nerd speak for what’s after HD. RED introduced another revolutionary idea: it eliminates the distinction between video and photography. Simply pick single frames from the video as perfect photographs. Videos and stills can be the same. Vogue Magazine is using RED in this way. If it’s good enough for them, it’s perfect for me.

Nguyen set about trying to implement similar functionality with a mobile app, but quickly realized he would have to compromise on his vision. Due to 3G networks not being fast enough to support his new vision, Color made the decision to disable audio for Live broadcasts using the Color app. This brought up the video quality and the performance of the app, and the company resigned itself to waiting for the U.S. wireless network infrastructure to improve. The deal with Verizon went down at this year’s Consumer Electronics Show, where Nguyen met with Verizon:

Then something amazing happened in January at CES. We had an opportunity to meet Kristi and Rob from Verizon. In a matter of minutes, I realized that Verizon’s 4G network and their influence on smartphone design would accelerate our plan by light years. We created a partnership to integrate Color into smartphones to take advantage of the “metal” or hardware not just software for encoding the HQ video. We could use their amazing, pervasive 4G network to deliver LIVE video directly from smartphones to the entire world.

The only question left is why Verizon subscribers are the only ones to get such a privilege. AT&T’s 4G speeds are better on average. That makes me think that there is something more to this deal than an idealistic vision for the future. Sarah Kessler at Mashable is quoting Nguyen as saying that Verizon is doing processing and computation on its network, rather than having the app do it. That explains a bit of why the deal was made, but still not why Verizon is willing to do this for the startup.

What do you think? Leave a comment below and let me know.

(Color blog via Mashable)

TechCrunch has obtained “roughly 50 MB of images and documents outlining the entire thing.” According to their post, the new photo sharing app looks incredible. The words used are “killer,” “awesome” and “amazing” – so that sounds promising.

The app, possibly titled “Hovertown” or “Withpeople,” is built on Facebook’s social graph but looks to be a standalone application as of right now. It’s likely that the app would be integrated into the Facebook iPhone app and even the main website eventually.

TechCrunch says that it looks like a hybrid of Path, Instagram and Color, which is pretty exciting to me considering how much of an Instagram fan I’ve become as of late. If that’s the case, the new app would promote seamless sharing with public groups, private groups and would contain cool filters and stuff, right?

This all sounds awesome, but I hope the photo sharing app works better than the actual Facebook app for iPhone. I’m only speaking from my own personal experience, but I’ve found that app to be a buggy mess at times.

And if this new app is launched relatively soon, one can only imagine it will be talked about as some sort of response to the news that Twitter will be deeply integrated into iOS 5. That move, as discussed, could change the world of mobile application development on the iPhone.

A couple of weeks ago, Twitter announced its partnership with PhotoBucket to provide users with a native photo uploading service. This will allow users to upload photos and attach them directly to their tweets without using a third-party service like yfrog or twitpic.

A lot of that was due the fact that they raised $41M prelaunch, have a well-known team, and the mobile photo-sharing space is really hot.

The other reason it was so talked about was because, for a $41M application, the product itself was really ineffective as a first-time user experience. Tech blogger Robert Scoble famously ranted about it, and many others tweeted or blogged about how confused they were by the user interface and the lack of social interaction.

Blowing the first-time user experience is never good, and I also felt like my first usage of Color was not fun or interesting.

However, due to the hype I fortunately knew enough to know that Color was designed for group experiences, so I didn’t write it off immediately and decided to try and use it with others.

I started using Color at a restaurant with GuideMe lead developer Joe Garstka, and later we added a couple of other users at my house.

The pictures and videos we were taking were automatically popping up in our applications and creating group albums based on time and location without us having to create and specify anything. Less work from the user is always good.

There is amazing potential behind implicit social networks and the automatic grouping of people based on location for an application. Also, creating a history of photos and videos at a specific location holds a lot of potential, and made it more likely that I would take a picture to leave it for future people to see when they were near that spot.

I think the key thing though that may make Color work, is that I found myself telling other people to try it with me. For the application to work, I needed others to participate. This is one of the key growth engines for successful network applications, and Color has that going for it.

On the flip side, it means early adopters without early adopter friends probably won’t use Color. People who are living in areas that are sparsely populated will also have a hard time getting that much value out of the application.

That might be okay though if Color can do various things to improve that first-time use while also letting the network effects happen.

There’s also a big opportunity here for Color, or other companies, to do the same type of creation of implicit location-based networks for other applications like gaming, chat, and more.

Color has a bright future, and enough cash in the bank to get over their initial rough launch.

Originally published on Conversion Rater

20th Century Fox has teamed up with the much talked about mobile app Color to provide fans a look into the premiere, both from the perspective of the fans outside as well as the people inside. Photos taken at the premiere, which is Sunday at the Ziegfeld Theatre in New York, will be instantly shared with those in the vicinity in a “Water for Elephants Premiere Group” or “conversation.”

You may ask how this benefits you, if you can’t make it to the NYC premiere on Sunday. Well, the aggregated content from the premiere will be streamed online at the site www.color.com/waterforelephants. Currently, the site asks us to come back Sunday when photos will start streaming at 4:30, when the stars begin to arrive. The site will also have an exclusive clip of the film available at 4 pm EST.

“Water For Elephants” is based on a massively popular novel of the same title by Sara Gruen.  The film stars Reese Witherspoon, Chritoph Waltz (Oooh, That’s a Bingo!) and up from the teeny vampire ranks, Robert Pattinson.

Not only will the shared photos come from fans on the outside, but Fox is having some of the producers and talent from the film take photos using the app, which should show fans the red carpet walk from the perspective of the stars.

The Hollywood Reporter talked to Color co-founder Peter Pham:

“With such a big following of Robert Pattinson and Reese Witherspoon, people will be camping out just to get to the front of the barricades,” Color co-founder Peter Pham tells THR, who likened the app to a “visual Twitter.” “It’ll give you a really good sense of what it’s like from the fan’s perspective. It’s not the high-def professional cameraman taking the photos perched in a specific spot.”

This most likely will not be the last time the entertainment industry calls upon Color or similar apps down the road.  Photo sharing, especially if those streams are broadcast to people at home, could give fans a look at concerts, premieres and award shows from the inside perspective.  And for celebriphiles, the inside perspective is what is most desired. 

Well, apparently that last part is a bit malleable.

Turns out the perception of one’s location is good enough to fool Color into letting you invade photostreams anywhere, anytime.  Within hours of its release, Veracode CTO Chris Wysopal tweeted:

When he tested it out, he found that he could go anywhere and see anything – much easier than expected.  He used a jailbroken iPad and an app called FakeLocation.  With this app, he was allowed to bypass the iPad’s GPS and set his location to anywhere in the world.

I’m sure most of you can see where this is going.

When he opened the Color app, bingo!  He could now browse all the photos from an area hundreds of miles away.  “This only took about five minutes to download the FakeLocation app and try a few locations where I figured there would be early adopters who like trying out the latest apps,” Wysopal told Forbes’ Andy Greenberg. “No hacking involved.”

To prove his success, Wysopal (in New York City) sent Greenberg a screencap of Color CEO Bill Nguyen’s photostream (Palo Alto, California):

Once again, this “cheat” is not ruffling any feathers over at Color headquarters.  As a spokesman said to Forbes, they never promised privacy.  “It is all public, and we’ve been very clear about that from the very beginning. Within the app, there’s already functionality to look through the entire social graph. Very few people will probably do what you’re saying, but all the pictures, all the comments, all the videos are out there for the public to see.”

And how many Color users, happy to share their photos with any stranger around them, would really care that the stranger lives in another state – or country?

No, color doesn’t have a strict emphasis on privacy. In fact, it’s just the opposite. Color’s stance is basically: if you want privacy, use something else.

Color says it collects the name you give them when you set up the app, your email address, pictures, videos, comments, and actions you take through the app (the content), and location info. When a user has the app active, their device sends Color’s server their location, and Color shares content with others. “Sharing Content publicly with others from different locations is what this App is about,” the company says. ” If you find this objectionable, please consider not using our App or Site.” (emphasis added)

Here’s more on what they share and collect, directly from the Color privacy policy:

HERE’S WHAT WE (AND YOU) SHARE WITH OTHERS: We share the name you give us when you set up the App on your Device, your Content, and possibly, the location from which your Content was created. Our App also allows you to share your name and Content on some social media sites. If you choose to use this function, we neither store nor share the information you input to access those sites through our App.

HERE’S WHAT WE COLLECT WHEN YOU ACCESS OUR SITE: The usual stuff. Like most online companies, we capture your browser and operating system information, and your IP address. We also collect cookies, which are tiny data files your computer sends us. We use cookies to customize your experience on our Site. If you want to disable the cookies, follow the directions on your browser. Currently, you don’t need a login and password to visit our Site, (but we’re considering it). Stay tuned.

HERE’S WHAT WE COLLECT IF YOU LET US: If you say it’s OK, we’ll store your mobile number. That way, if you lose or replace your Device, we can re-associate your past activity and Content with your new Device. We won’t call you. We also collect information from your Device’s address book. We think you might be interested in seeing your friends’ Content. By collecting your mobile number and address book information, and linking it to your Device, our software makes the Content you see more relevant to you, and you’ll be able to use certain SMS functions we’re cooking up. It also allows you to link your Color experience to your other online social experiences. If you’re not OK with this, just say no and we won’t do it.

As is the case with most privacy sacrifices from social products, it’s essentially a trade-off of privacy for user experience.

“In many ways they are inviting the privacy tension, but it is memory about things made public that creates both a level of utility and more significant harm,” said SocialText CEO Ross Mayfield in another article we ran. “I wonder how much they have thought it through. Some like LinkedIn did, others died, other blasted through it regardless.”

One more interesting point brought up in Color’s privacy policy is that if Color is acquired or if it acquires another company, these other entities will gain the same info that Color has already collected. Pretty standard, but it does seem to suggest that Color is not launching with a not-for-sale sign.

CEO Ben Nguyen’s previous company, Lala, was acquired by Apple. I’m guessing there will be a number of potential buyers for Color if the price is right. As John Battelle said in a post about Color, “Note to Facebook, Twitter, and Foursquare: If you don’t get this feature into your service, pronto, you will more likely than not be rueing the day Color launched.”

Color promises to update users as its policy changes. It was last updated earlier this week. Privacy concerns can be sent to privacy@color.com.

More on Color itself here.

This is also why Color’s launch was received with such mixed reviews. They are trying to use location as the implicit social graph, but there is no real interest. Even if there are several people at the same location, the location may denote different purposes. As an example, if I am at a restaurant I probably do not want the interruption that would come with a location based graph. However, if I am visiting a tourist attraction I may welcome the location-based interaction, mainly because there is implicit interest in the location.

Fred Wilson has a very good description of how he was introduced to implicit graphs:

My first experience with this sort of implicit social graph came almost six years ago via my musical neighbors graph at last.fm. I don’t think I actually know any of these people in real life, but they are the last.fm users who have the closest taste to mine in music, right now. That right now is important because my musical neighbors graph looked differently last year and will look differently next year.

Obviously, people’s musical tastes change over the years, so a static graph is not entirely useful. The “musical neighbors” concept and Pandora’s music genome concept allow for discovery because they are using similar interests to create the implicit graph. A person’s friends may not have the same musical tastes and thus would actually clutter the listening experience with music the listener is not interested in.

In addition to the creation of implicit graphs, sometimes there needs to be a conversion from the implicit to the explicit graph. Colin Walker talks about this in reference to sporting events and other interest-based interactions:

Repeated interactions within implicit graphs can lead to a bleed from the implicit to explicit – once you get to know them some of those from implicit graph become ‘friends’ and, after a while, can be invited over in to the explicit graph.

This bleeding complicates the structures of explicit graphs because these new “friends” are not initially the same type of friends as those people you have known for years. Then there are some people in your explicit social graphs that you lose contact with. Even though they could have been friends previously, differing interests and the effects of time can change their relationship to you. This is where the concepts behind Color become interesting. Obviously, there needs to be some flexibility or “elasticity” in your social graphs, regardless of whether the graph is explicit or implicit. Color CEO Bill Nguyen had an interesting comment about this in a ReadWriteWeb article:

In the world of Facebook, once someone is your friend, they’re your friend until you return and re-evaluate that relationship, regardless of whether or not you’ve ever spoken to them again. In reality, the relationship could have fizzled long ago, yet it’s still a bond as good as any. With Color’s “elastic” social graph, these ties can fade and disappear. Color’s ability to accurately determine location and user proximity is what makes this sort of social graph – an implied, impermanent and elastic social graph – even possible.

As I previously stated, I do not agree with the importance of location in this quote, but the general concept is important. Location and time can both be an attribute of the implicit social graph, as can be seen with the SXSW conference. Just because you are in Austin does not mean that you share the social graph with a bunch of people. However, if you happen to be near specific locations in Austin during the same time as the SXSW conference and you have previously shown interest in web and technology startups, then you would be part of the same implicit social graph. Without the interest part of the equation, you could become part of the implicit graph purely by coincidence, maybe you work or live in Austin.

Om Malik has an excellent post this morning that really hits the same points, but talks about them differently. He mentions “happiness” and “utility”:

One of the reasons Instagr.am works is because it has that “happiness” attached to it. When I see my friend’s baby boy, it brings me joy. I see Mathew Ingram at an ice hockey game; it makes me warms my heart to see him enjoying time with his family. I reward Instagr.am with my attention because it makes me happy. That is its utility.

His examples and Fred Wilson’s examples are excellent reasons why some social applications really work well and others don’t get traction.  Implicit social graphs are really driven by interests where time and location can be attributes of that interest but they are not the primary definition of that interest.

Originally published on Regular Geek

In case you don’t know, Sequoia Capital has provided funding for Apple, Google, Oracle, PayPal, YouTube, LinkedIn, Cisco, NVIDIA, Yahoo, Kayak, Zappos, and even Electronic Arts and Atari, to name a few.

“Just as the iPhone changed everything about mobile phones, so Color will transform the way people communicate with each other,” said Sequoia Capital partner Doug Leone. “Once or twice a decade a company emerges from Silicon Valley that can change everything. Color is one of those companies.”

Read here for more about what Color actually does, if you don’t know about it yet. In a nutshell, it’s about social picture taking – taking pictures together, and perhaps even more importantly – archiving. Here’s a snippet from Color’s announcement:

Every photo and video captured using Color is stored on the Web for immediate access via the application without requiring massive amounts of storage space on your phone. Capture every experience without worrying about using up memory; Color has infinite capacity. Each day is beautifully displayed as a series of thumbnail images. Scroll through days, weeks, or even months, instantly using an intuitive touch interface. Tap on any image to go back to the day when it was originally captured for full contextual information, like who was involved, who saw it, and whatever conversation it sparked. Looking back has never been so detailed, easy and fun.

“Color is the most advanced and intuitive way to share with your iPhone and other smartphones,” says Color CEO Bill Nguyen, who also co-founded Lala, which would later be acquired by Apple. “We are happiest when we experience life together: not alone and days later online. By creating Color, we made it possible to instantly capture, experience and share life with those around you without rigid Web concepts like ‘friending.’ We believe real social interactions are dynamic and evolve with time.”

He certainly has a point there. How many people are you friends with on Facebook that you rarely (if ever) actually speak to? How many people do you meet and form connections with that you aren’t Facebook friends with?

John Battelle had some interesting things to say about Color, suggesting that it might be the “execution of augmented reality that truly scales.” That’s a whole other conversation, and an interesting one at that. “In short, if Color is used by a statistically significant percentage of folks, nearly every location that matters on earth will soon be draped in an ever-growing tapestry of visual cloth, one that no doubt will also garner commentary, narrative structure, social graph meaning, and plasticity of interpretation,” Battelle wrote. “Imagine if Color – and the fundaments which allow its existence – had existed for the past 100 years. Imagine what Color might have revealed during the Kennedy assassination, or the recent uprisings in North Africa and the Middle East, or hell, the Rodney King beating?”

It is worth noting, that there are other ways to geo-tag photos, but Color could bring an interesting new dynamic to this.

Naturally, privacy concerns over such a service are already mounting. Don’t like it when people tag you in a Facebook photo, which you have no control over until after the fact? You’re probably going to love this. Color takes the Twitter-style concept of what you post is public, and applies it to photos.

The funding will be used to develop Color’s technology and expand globally, the company says. They’re already rushing with the updates (with good reason considering the amount of attention the app – which is available for both iPhone and Android currently – is receiving).

Nguyen told Ben Parr at Mashable that the next version won’t even let you use the app unless someone else is nearby, as “it’s going to make no sense” without other people using it nearby.

Color is even attracting some celebrity attention, which has historically been pretty helpful in getting new services to catch on. It certainly did wonders for Twitter.

It’s entirely possible that Color is more hype than revolution. We’ll know in time. There’s no question, however, that some interesting ideas have developed as a result of its launch.

Do you think Color is going to be huge? Share your thoughts in the comments.