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Color: A Revolutionary, Secretive New Social Network

Thursday, 24 Mar 2011 | 12:29 PM ET

A new social networking app called "Color" launches today, but it's not trying to compete with Facebook. It's for connecting with the people right next to you, not far-flung friends. It doesn't work on your laptop or desktop, just on smartphones. And it's designed to be entirely open, like Twitter — it doesn't even have the option of privacy settings. The smartphone app is for sharing photos, text messages and video, automatically, with anyone else using it within 100 feet.

Color has been top secret until today. Serial entrepreneur Bill Nguyen managed to raise $41 million from top VCs, Sequoia, Bain, and Silicon Valley bank — all without any news leaking out. Nguyen sold his last company, Lala.com to Apple for $80 million, and is drawing on his connections at both Apple and Google to help get the app prime placement in the app stores.

Color
Source: iTunes
Color

So what's Color for?

Let's say you're at a party. You open the free app and take a photo — you don't have to log in or upload the photo. It's automatically shared with other people in the room and you can see everything they're snapping.

It's like an instant Twitter feed of photos from all the people in close proximity to you. Since you spend a lot of time near your spouse, he or she would also see the feed of photos from the people around you, and you of him or her.

Color is not for those with privacy concerns — it's only designed to be on when you're living your life in public. There are some safeguards — like you can block certain other users — but once you open the app you and your presence can be documented and shared.

The app will only be effective if a lot of people use it. But if it does catch on, it could be incredibly valuable in situations like protests in the middle east or after a natural disaster, like the Japanese tsunami. Twitter allows you to connect with people talking about the same thing. Color allows you to see what people near you are talking about and taking pictures of. And Color is a Twitter developer, so photos from the app can be Tweeted out.

CEO Nguyen says he sees even further Twitter integration down the line.

The app is free and launching without ads, but the company plans to eventually make money from ads targeting users' location. When you're in a restaurant it could serve ads with photos of what your friends (based on who you spend time around) took pictures of or wrote text updates about.

Color could truly revolutionize the way we think about communication. The question is whether its total openness will spook users concerned about privacy, and whether it can get to a critical mass quickly enough to take off.

Questions? Comments? MediaMoney@cnbc.com

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  • Working from Los Angeles, Boorstin is CNBC's media and entertainment reporter and editor of CNBC.com's Media Money section.