Color finally waves white flag; plans to shut down, report says

Color, a mightily hyped mobile application that tried for more than a year to gain a loyal fan base, has finally decided to close its doors, according to a report.

The company yesterday sent an e-mail to employees saying that its board and shareholders last week decided to "wind down the company," Venturebeat is reporting, citing a source. That e-mail, which was not published in its entirety, didn't say when the company will officially shut down its operation, but it did ask employees to immediately cancel "any existing commitments."

Color made a splash last year as a location-based photo-sharing app for iOS and Android. In its first iteration, the app would allow users to see photos taken by other Color users in close proximity.

The idea was highly touted by investors, who dumped $41 million into the project before its launch. The app also earned some hype because it was developed by Bill Nguyen, founder of streaming-music service Lala, which was bought out -- and quickly shuttered -- by Apple.

However, Color was unable to attract a broad audience, forcing the company to reinvent the app last September as a social-sharing tool for Facebook users that essentially allowed them to view friends' photos. The app also added a "Visit" function that would let a user request real-time viewing of wherever the friend was. If the feature was activated, a live broadcast would be sent back to the requester.

Over the last year, Color has still had trouble attracting users, and turmoil has quickly set in at the top: Nguyen has reportedly stepped down from day-to-day operations, leaving his company in the hands of other top executives.

CNET has contacted Color and its main investors, Sequoia Capital, for comment on the report. We will update this story when we have more information.