Created by Color Labs, a startup formed by Lala founder Bill Nguyen, the app generates a network of Color users based solely on proximity. After loading the free iPhone or Android app, users take photographs. Once online, the software locates nearby phones via its "elastic networking" technology, then combines other users' photographs from the same location, storing the shots on a cloud-based server, and making them viewable on social media sites such as Twitter.
There is no password, no friending, and no way for users to limit private content to specific individuals.
"The days of having to say anything are done," Nguyen told the Associated Press. "There're no more profiles, there's no more friending, there's no more electronic dog fence created by Facebook. It's all over. This is the post-PC world. It's a brand new way of sharing."
This approach also means there is no privacy, a possible concern to some users and enterprises whose employees could use Color. The company spells out its policy in its privacy terms.
"When you create content using our app, that content is immediately published to any unique user who has the app open near you, and often to unique users with whom you've had past contact with (whether they are geographically close or not)," the terms said. "That content is also published and available for viewing through various social media sites. Unique users can view your content and can send to anyone a link to your content, the content of other unique users, or compilations that include your content. Anyone: from grandparents to bosses."
The online world was abuzz at Color's financing: The company has received $41 million in funding from Bain Capital Ventures, Sequoia Capital and Silicon Valley Bank.
"I can just see the pitch for Color: It's Twitter meets Groupon meets Instagram. So it's worth $10B x $25B x $20M = 1 Gajillion!" tweeted David Heinemeier, creator of Ruby On Rails and partner at 37 Signals, who posted what appears to be a joke version of the pitch shown to venture capitalists.
Color Labs plans to seek revenue from advertising before the end of the year, Mike Krupka, managing director of Bain Capital Ventures, told the AP. Restaurants could, for example, post photographs of specials to recent diners.
Increasingly, enterprises are using mobile and location-based services as part of their advertising campaigns. Total mobile advertising in the United States is expected to reach $1.5 billion by 2103, up from $593 million in 2010, according to eMarketer.
Spending on location-based marketing will grow to $1.8 billion by 2015, Aberdeen Research estimated. Businesses are measuring the return on investment for tools such as coupons, promotions, and other specials offered directly to consumers' smartphones. By 2014, 1.4 billion consumers will use location-based services, Gartner predicted, further encouraging businesses to invest in campaigns addressing this group through tailored offerings.
American Express, for example, partnered with Foursquare on a pilot, expected to roll out more widely later this year, that gave special discounts to South by Southwest Interactive attendees and residents of host city Austin, Texas.
"In general, American Express needs to go where our card members and our merchants are. More and more they're using social media, and they're using Foursquare," Dave Wolf, vice president of global marketing capabilities, said in an interview earlier this month.