Oh, good. More "sharing." The mobile social-app company Path (yes, the one that found itself in the middle a big privacy controversy not long ago) announced on Monday that it had landed another $30 million in venture financing from some top-tier firms, making its total valuation $250 million. Hey, that's only a quarter of the $1 billion that Facebook is paying for Instagram, a company that, as Jon Stewart put it last week, makes "a thing that kind of ruins your pictures."
Path, founded by former Facebook exec Dave Morin, is, "part of a flurry of apps trying to turn smartphones into personal journals," says the Wall Street Journal. It allows photo-sharing, song-sharing, and status updates. Sounds familiar, no?
In a product demo on the company's homepage, "Leigh from Path" tells us that the app allows her to share not only photos, music, and video, but also "what I'm thinking, and when I wake up and go to sleep." And it "automatically shares when I change neighborhoods." (Emphasis mine.)
Need any snark be applied to this? It sounds at least as inane as Foursquare, by Leigh's description, but it has the added feature of being more superfluous than Google Plus.
It's possible that Path is simply building the mobile app that Facebook has so far failed to build. Facebook's app, at least on the iPhone -- and from what I hear also on Android -- is crap. If Facebook ends up buying Path, problem solved, perhaps. And maybe it will only cost them a billion. Or two. Whatever.
One of Path's selling points is, in fact, integration with Facebook, Twitter, and Foursquare. Another selling point is that it's meant for people to link up with only a small number of people -- "close friends and family." The limit is 150, and so far the average is just 40 (which is 10 more than the total number of Path employees). Supposedly, this makes people more inclined to "share," since only their closest friends and family will see that they're going to sleep, or waking up, or thinking.
Of course, one may already limit one's sharing on Facebook. Path might make it a little easier than setting up lists on Facebook is. I can't tell because after I downloaded the app, I tried to find some of my Facebook friends who were using it so I could check it out. Apparently none are, or at least they aren't linked to it through Facebook.
Path's valuation, like Instagram's, has nothing to do with its revenue-generating potential. So far, it has little of that. David Sze, a partner with Greylock, one of the venture capital firms that has invested in Path (and also in Instagram), told the Journal: "A lot of times with these companies, it is not initially completely clear what the revenue path is going to be. But they are able to get stunningly large scale and growth on a relatively small amount of capital."
After reading that statement, those of you who were around for the dot-com boom and bust might want to check whether your hair just suddenly turned white. And you should be forewarned that the next quote, from CEO Morin, is even more chilling: "The entire mobile app industry is still in its early stages," he told the Journal. "Mobile monetization is basically in 1999 right now."
Now, given that Morin was a freshman in college in 1999, it might be tempting to give him a pass. But still, he must know what happened over the next couple of years, "monetization"-wise, mustn't he? For one thing, people stopped using words like "monetization" so much, at least for a while. Because the "mone" part of that word ceased to have much meaning.
Path says it has about 3 million users, about one-sixth of whom use the service several times every day. It has shown no profits. Its revenue sources for now include things like selling photo-filtering services (much like Instagram's) to users. The company hopes to offer a premium app sometime in the next year, Morin told the Journal.
Still, this could easily all work out in Path's favor. The dot-com boom was all about going public. These days, in many cases, it's all about being acquired by a giant like Facebook or Google. That at least has the benefit of insulating naive public investors from taking losses on silly business plans. (The insulation isn't total, of course, as one look at Pandora's stock price -- or Demand Media's, or FriendFinder Networks' -- will attest.) And like Instagram, Path might simply be creating a new feature for Facebook. In which case, and assuming it works well, it might actually be a great business.
Dan Mitchell has written for Fortune, the New York Times, Slate, Wired, National Public Radio, the Chicago Tribune, and many others.