Color: the app that never had a chance closes down

Color app shut down a

After creating massive initial buzz and getting US$41-million in funding for development, the free for iPhone social networking app Color has been shut down. “Alert: We hope you’ve enjoyed sharing your stories via real-time video. Regretfully, the app will no longer be available after 12/31/2012,” the leading message on the app’s site reads.

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That’s a fast fall for a company that Google was reportedly willing to pony up US$200-million for at one stage.

Color, the brainchild of Bill Nguyen, seemed to fade very quickly after its release. A less than stellar launch, the departure of its president and a co-founder and Nguyen’s “start-up-shut-down” business manner seemed to be too much to bear for the future of the app.

Parent company, Color Labs, is also taking steps to shut down and has started to filter down assets to shareholders, according to Harmeet Dhillon, the lawyer for Adam Witherspoon, a former employee and shareholder, who is now suing Color Labs for emotional distress.

Less than a month ago, rumours that the app would shut down was emphatically denied by Sequoia Capital, the lead investor in Color. How the US$41-million will be delivered to shareholders is not known yet, but Apple has paid close to US$7-million in a deal for the transfer of about 20 Color employees, according to TechCrunch.

Nguyen’s previous effort Lala was sold to Apple for US$80-million back in 2009.

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