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Apple's Color Labs Acquisition Involves Only Color's Engineering Team

Thursday October 18, 2012 10:43 am PDT by Eric Slivka
Late yesterday, The Next Web reported that Apple was finalizing a deal to acquire Color Labs, the video streaming service and app founded by Lala Media veteran Bill Nguyen. The report came at the end of a confusing day in which an internal memo indicated that the company was being shut down, only to have the company deny those claims.

AllThingsD now provides significantly more clarity to situation, revealing that Apple is only acquiring Color's 20-member engineering team for a relatively small sum.
What’s really happening is that Color’s engineering team — about 20 people, comprising almost the entire company — is being “acqhired” by Apple at what’s being called a “nominal” price of something like $2 million to $5 million, according to multiple sources familiar with both sides of the situation. To repeat, there are no “double-digit” millions involved, according to many people familiar with the deal.

Apple is not buying Color’s technology, intellectual property, domain names or liabilities. Those are being left with the company, which still has considerable cash in the bank — something like $25 million — and is going to be wound down.
Apple is reportedly bringing Color's engineers on board to work on cloud-related projects.

The report notes that there is a significant amount of bad blood between the various parties involved at Color and even Apple, contributing to the mass confusion yesterday about what exactly is happening with Color. Apple and Color have yet to comment on the deal.

Tag: allthingsd.com
[ 44 comments ]


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Krazy Bill
83 months ago
I know profits are <cough> tight these days but perhaps Apple can grow the OSX team from 2 people to 3 now?
Rating: 14 Votes
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JAT
83 months ago
OMG! They are buying people!
Rating: 9 Votes
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GoCubsGo
83 months ago

Dang, they must have some skillz.


Serious? This is the best you could come up with?

I have a feeling that we're going to see a social media YouTube-like site coming from Apple. Between this and Particle, it seems possible.
Rating: 6 Votes
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Renzatic
83 months ago
Now that Apple has bought the greatest color team in the industry, they'll get to work inventing a new color, fyornk, that'll be the most innovative, magical color in the rainbow.

Samsung will, of course, copy. But all they'll be able to produce is a cheap off-yellow color that only poor people will buy.
Rating: 6 Votes
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Saladinos
83 months ago

OMG! They are buying people!


Almost literally. If I were on that team, and Apple paid $2-5M for the team, I'd want a share of that cash.

Between 20 people comes out to between $100K - $200K each.
Rating: 5 Votes
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paul4339
83 months ago

Almost literally. If I were on that team, and Apple paid $2-5M for the team, I'd want a share of that cash.

Between 20 people comes out to between $100K - $200K each.


I guess it depends what the deal was and how much the employees got out it... There's not much to stop Apple from saying to all their employees: if all 20 of you quit and join us, we'll give a $150k sign-up bonus to each (maybe throw a million to the company as goodwill, so they won't put up a fuss).

... sorta like an employee Groupon: buy all 20 and the deal's on!
Rating: 4 Votes
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The Phazer
83 months ago

Looks like some kind of iCloud based video offering is on the cards.


But designed by an engineering team who don't seem to have ever put together something anyone liked :-(
Rating: 3 Votes
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tbrinkma
83 months ago

Almost literally. If I were on that team, and Apple paid $2-5M for the team, I'd want a share of that cash.

Between 20 people comes out to between $100K - $200K each.


Not even remotely literally. Color had a software engineering division. These employees worked for that division. Apple acquired the division. These employees still work for that division. (They have the same option to leave during or after the acquisition as they did before the acquisition.)

The difference between doing things this way and individually hiring the employees amounts to both parties getting to ignore any non-compete agreements the engineers may have signed, and a simplification of the paperwork involved for each employee brought over this way. (At the expense of a single set of additional paperwork for the acquisition itself.)

It boggles my mind that people either don't understand this (or simply don't know what "literally" means), but feel the need to make broad, unfounded, rediculous statements anyway.

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I'd venture a guess that a company that has roughly $25M in cash on the books with total employees of <30 is hardly sinking.


Given that they supposedly had a $41M initial round of venture capital, if they aren't actively sinking, they certainly seem to be taking on a lot of water. :D
Rating: 2 Votes
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8ate8
83 months ago

It's worth mentioning, since I didn't see it elsewhere


Like in yesterday's news post perhaps...
Rating: 2 Votes
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mightymike107
83 months ago
It's worth mentioning, since I didn't see it elsewhere, that Lala (Bill Nguyen's previous venture) was also purchased by Apple back in 2009
Rating: 2 Votes

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