Apple May Acquire Media Sharing Startup Color Labs

Following the news of Apple’s acquisition of the web app firm Particle, a San Francisco-based creative consulting company that specializes in HTML5-based web apps, the news of yet another Apple buyout appeared online Wednesday.

The news came from The Next Web claiming that the Cupertino tech giant was also in the process of acquiring Color Labs, a Palo Alto-based social startup that allows its users to share photos and videos through its Android and iOS apps.

“We’ve heard through trusted sources that the startup was nabbed for a price that is in the ‘high double digits,’ as in millions, and that the deal is ‘done’, though papers have yet to be signed,” TNW reported.

According to another report by VentureBeat Wednesday, Color Labs that faced much criticism because of its pre-launch $41 million funding round, was voted by the company leaders “to wind down.” However, the company issued a brief statement after that saying it was not in the process of shutting down.

Color Labs was founded by Bill Nguyen and Peter Pham in 2011. The company’s first photo-sharing app was a failure that prompted Pham to quit three months after launch. One month later, the company’s Chief Product Officer D.J. Patil also made his exit.

In a bid to change strategies, Nguyen created a new video-sharing app, allowing users to record and post 30-second silent videos to Facebook. This was the move that helped Color labs strike a deal with Verizon in May.

According to TNW, Nguyen had been looking to sell the company for months and was absent for three months, supposedly because of the tension between him and the board. Nguyen was also behind Lala Media, the streaming music service that Apple acquired in late 2009.

Although it’s not yet clear why Apple would want to buy a struggling media sharing startup, TNW tried to solve the mystery:

“As to why they’d want Color Labs? We would look to Color’s patents, which may include ones for a file format that they were working on to record HD video. Color said that it had six patents pending at the time of its funding, including its ‘elastic’ social graph and patents related to GPS location and battery saving. iOS developer Daniel Jalkut uncovered several patent applications that Color has filed for in the last couple of months that have names like ‘sharing content among a group of devices’ and ‘user device group formation’.”

“All of those patents reference a provisional application filed back in March of 2012 on the multiple device method. It’s not much of a stretch to say these patents could be applied to Apple’s Photo Stream feature in iOS 6,” the report added.

Search engine giant Google also reportedly offered to buy Color Labs for $200 million in July. But the company turned down the offer.