According to a single well-placed source inside Apple’s engineering team, the company is poised to announce an acquisition of Dave Morin’s Path social network. To quote our source, who requested to remain anonymous because the deal has not been announced yet, “It’s almost done, if not signed already, but it’s essentially a done deal.”
If true, it would be major news for the heretofore struggling social platform that has been known more for its design and user interface innovations than for its ability to drive adoption among consumers – particularly in non-Asian markets. Apple hasn’t fared much better in the social realm historically, having flopped with its Ping social network and having made very little out of its acquisition of the team and IP from failed location-based photo social network, Color.
According to our source, this is more than just a talent acquisition, or acquihire. The Path product will likely survive the acquisition and be incorporated, in whole or in part, into Apple’s newly refreshed Messages app. That doesn’t mean that the deal will be priced like some other recent high-profile mobile communication deals, namely Facebook’s $ 19 billion Whatsapp acquisition and rumored $ 3 billion-plus offers extended to Snapchat by Facebook and Google.
Facebook paid $ 42 per Whatsapp user, and $ 33 per Instagram user before that. By comparison, Rakuten bought the far less beloved Viber for just $ 3 per user. With Path having somewhere in the vicinity of 25 million users at the beginning of this year, and far weaker growth and engagement than any of the above platforms, it would be lucky to command anywhere near Instagram/Whatsapp sums. According to App Annie, Path ranks just 177th among iOS Social Networking apps in the US and not among the top 1000 overall iOS apps. When Path raised its most recent round in January of this year, the company reportedly commanded a sub-$ 400 million valuation, well below the $ 500 million-plus levels reportedly sought by management. Given the trajectory it was on, exiting at that level would likely be considered a win among most Path insiders. Hell, for many Valley observers, that would be the win of the century for Path investors, many of which have all but left the company for dead.
Apple’s re-entry into social would also be a notable development. With Facebook (including Instagram and Whatsapp), Twitter, and Snapchat each looking stronger than ever in their respective social verticals, it’s unclear just where an Apple-driven social product would fit in among consumers daily habits. Google seems to have reached a similar conclusion, all but abandoning its strategy of pushing Google+ as a standalone social platform, and instead choosing to let the platform fade into the background of its other consumers platforms like Gmail and YouTube. Apple’s one stronghold has been in messaging via iMessage, which recently got a facelift. And Path has recently leaned more in this direction with its launch of an ephemeral messaging product, abandoning its long-held love of more lasting, intimate communications. It’s certainly conceivable that Path could be integrated into Apple’s messaging platform, but it’s unclear, beyond the design prowess, how this acquisition helps Apple, at any price.
Adding additional fuel to this fire, Dave Morin was spotted sitting in the front row for today’s Apple keynote event, a high profile position reserved for Dr. Dre and other key Apple insiders. Apple has been known to be a fan of Morin’s, as well as the Path design aesthetic and broader design team. Take for example the company’s decision to feature the Path app early on in numerous keynotes and advertising campaigns. In that sense, it wouldn’t be that surprising if such a deal were to be consummated. Jason Calacanis made a similar observation in his evening email newsletter today, noting Morin’s seating at today’s event and Apple’s long-standing frustrations around social. Others have been asking whether such an acquisition makes sense for years.
To be clear, even if our source is correct, these transactions are never a sure thing until ink has been put to paper and (at least in the case of a public company like Apple) a public announcement has been made. But the tea leaves seem to be aligning on this deal. It’s certainly an unexpected outcome, but it would sound even more crazy if Apple didn’t have north of $ 150 billion in cash burning a hole in its pocket and a love for all things aesthetic. And with Morin’s vaunted reputation for design, and Apple’s social struggles I can’t think of a better home for the once-hyped app. Don’t be surprised to see Apple swoop in to rescue Path from social also-ran status.
Pando has reached out to Morin for confirmation (or otherwise) of the claim. We will update this post as soon as I hear back.
Path brings people closer together. Guided by the belief that mobile technology will fundamentally change the cultural, social, and economic landscape, Path focuses on simplicity, quality, and privacy to reinvent how you interact with the people, places, and things in your life.