"eventually offering $100 million for the company plus an earnout of $25 million to be paid over four years"
Terms, terms, TERMS people. I can't believe that with 40+ comments there isn't more discussion of the terms.
It could have been $100M in Google stock on a 4-year vest, plus $25M cash on a 4-year earn-out. At those terms, it's really only a $25M deal if the founding team doesn't think they're going to sit around at Google for 4+ years.
Basically, the one sentence above tells us very little about this purported offer and the reasoning for turning it down. I would wait a week for more details to emerge before jumping to any conclusions about bubbles, co-founder betrayal, or anything else.
why would the founding team leave with $75m worth of Google stock on the table, all they have to do is show up for three more years.
Given a choice between a nice job at Google with a multi-million dollar salary doing the thing you love with the resources and infrastructure of Google behind you vs going it alone, the choice seems (no matter what the terms) like a poor one. It's not like Path have any really ground breaking technology. How defensible really is the idea?
That is a very good point. The article gives no detailed term information other than the big looking number, $100 million. A sum that could come in any number of terms with most being worth significantly less then were it cash.
I will say Dave Morin seems to have made some good calls in his day.
Given the app isn't particularly popular or compelling, I'm a bit incredulous over the fact that you only need a couple of internet-famous co-founders to warrant a $100MM offer.
I won't conclude that there wasn't more to offer than just internet fame, but I will say that brand is something that companies will pay a big premium for.
How about this one : Faceless. Social sharing of pictures of your possessions and favorite things that are guaranteed by face recognition not to contain people in them. Find and meet new people by interest, taste.
To be fair, they raised funding at more modest (but still crazy, depending on perspective) 25m pre according to the article. Seems like Google is just looking for ways to spend their cash.
I wonder if Google is worried (or should be worried) about these recent high-profile rejections of its very generous acquisition offers? Yelp, Groupon, Path, etc.
As easy as that is to say, this isn't a get-bought-and-get-paid company; it's a shake-up-the-world company. I'm sure he and his co-founders discussed that at length and understand it.
And ultimately, if you have a remarkable team with strong financial backing, isn't that the type of company you really want to work for?
what a bad name, it's hard to even search for them. Turning down $100m was insanity, and the friction between co-founders will very likely fester and be terminal for them.
There are very few examples of companies turning down large offers and subsequently regretting it. There has to be something pretty good going on to get an offer like that.
I guess the team turned it down in the hopes Path will be many times the offer. I just don't see how an iPhone app can worth more than $120 million. I think the most successful app would be angry birds, but i doubt even the most optimistic valuation would put them over one billion.
Angry Birds, in a sane world, should be worth no where near one billion. They have sold less than 100 million copies, and I doubt they can keep on repeating their success year after year. It's a fad that will soon be replaced, just like Doodle Jump and Flight Control before it.
Any thoughtful speculation about why they said no? It seems to me more like a personal vendetta response from a Facebook-faithful (i.e. anti-Google) than justified by economical reason.
A niche social network platform acquired for $100MM? That's outlandish enough. I can't imagine their value exceeding that later on.
Offers like this really reinforce the conventional wisdom that your best bet to make it big is to strike out on your own, build something that a big company would like to get into and then sell it to them.
No employee pushing a social network idea or design proposals within Google is going to get compensation anything like this.
Path's name itself reveals the nature of their choice. Getting bought out is the end of their startup story, the conclusion of their "path". While the choice is apparently absurd, it at least stays true to their company's core values.
The sad observation is that Path simply isn't a valuable enough product to create a great story unless they undergo massive pivots. So it begs the question as to the motive, is this anything more than a silicon valley ego contest? Parker was fictionalized in The Social Network, Fanning wasn't.
Perhaps the purpose of the choice is to put themselves on a path to fame by creating not a groundbreaking product but a breath taking story, the path they blaze.
I find it interesting that Google would be willing to pay $100M for "the team’s “design skills,” and were very enthusiastic to get a prominent ex-Facebooker, Morin, at Google. They hoped it might help Google recruit more Facebook employees over time."
They've taken a big gamble by not selling at $100mil, which seems very generous. It'll be interesting to see where they end up in 5 years.
Maybe going the Groupon route? Or, trying to. It's hard to know whether or not they know things that the general public and Google doesn't, or that Google knows something we don't.
Interested to see how this pans out on both sides and the industry's reactions along the way! Thanks for all the comments.
[+] [-] portman|15 years ago|reply
Terms, terms, TERMS people. I can't believe that with 40+ comments there isn't more discussion of the terms.
It could have been $100M in Google stock on a 4-year vest, plus $25M cash on a 4-year earn-out. At those terms, it's really only a $25M deal if the founding team doesn't think they're going to sit around at Google for 4+ years.
Basically, the one sentence above tells us very little about this purported offer and the reasoning for turning it down. I would wait a week for more details to emerge before jumping to any conclusions about bubbles, co-founder betrayal, or anything else.
[+] [-] sfphotoarts|15 years ago|reply
Given a choice between a nice job at Google with a multi-million dollar salary doing the thing you love with the resources and infrastructure of Google behind you vs going it alone, the choice seems (no matter what the terms) like a poor one. It's not like Path have any really ground breaking technology. How defensible really is the idea?
[+] [-] austinB|15 years ago|reply
I will say Dave Morin seems to have made some good calls in his day.
[+] [-] pjhyett|15 years ago|reply
[+] [-] johnrob|15 years ago|reply
[+] [-] jasontan|15 years ago|reply
[+] [-] issaco|15 years ago|reply
[+] [-] thankuz|15 years ago|reply
[+] [-] unknown|15 years ago|reply
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[+] [-] zone2|15 years ago|reply
[+] [-] dmitrypakhomkin|15 years ago|reply
[+] [-] jewgonewild|15 years ago|reply
[+] [-] whakojacko|15 years ago|reply
[+] [-] defen|15 years ago|reply
[+] [-] lotusleaf1987|15 years ago|reply
[+] [-] btmorex|15 years ago|reply
[+] [-] bmcmanus|15 years ago|reply
And ultimately, if you have a remarkable team with strong financial backing, isn't that the type of company you really want to work for?
[+] [-] olivercameron|15 years ago|reply
[+] [-] geekfactor|15 years ago|reply
[+] [-] benologist|15 years ago|reply
That's a lot of love.
[+] [-] sfphotoarts|15 years ago|reply
[+] [-] Charuru|15 years ago|reply
[+] [-] johnrob|15 years ago|reply
[+] [-] samwise|15 years ago|reply
I guess the team turned it down in the hopes Path will be many times the offer. I just don't see how an iPhone app can worth more than $120 million. I think the most successful app would be angry birds, but i doubt even the most optimistic valuation would put them over one billion.
[+] [-] olivercameron|15 years ago|reply
[+] [-] vnchr|15 years ago|reply
A niche social network platform acquired for $100MM? That's outlandish enough. I can't imagine their value exceeding that later on.
[+] [-] daveambrose|15 years ago|reply
[+] [-] vhackish|15 years ago|reply
Back in the mid 80s companies would have killed for money like this!
[+] [-] brown9-2|15 years ago|reply
No employee pushing a social network idea or design proposals within Google is going to get compensation anything like this.
[+] [-] marknadal|15 years ago|reply
[+] [-] staunch|15 years ago|reply
[+] [-] CoachRufus87|15 years ago|reply
[+] [-] danielayele|15 years ago|reply
[+] [-] yumraj|15 years ago|reply
[+] [-] melvinram|15 years ago|reply
http://www.youtube.com/watch?v=-qR0Uke2XNI
I find it interesting that Google would be willing to pay $100M for "the team’s “design skills,” and were very enthusiastic to get a prominent ex-Facebooker, Morin, at Google. They hoped it might help Google recruit more Facebook employees over time."
They've taken a big gamble by not selling at $100mil, which seems very generous. It'll be interesting to see where they end up in 5 years.
[+] [-] thankuz|15 years ago|reply
Interested to see how this pans out on both sides and the industry's reactions along the way! Thanks for all the comments.