The $41 million mobile app – or the Web bubble debate, now in full color!

Bubble or no bubble?ColorScreen

The debate has become a favorite pastime within the Internet industry, as startup valuations soar and investors vie to buy shares of hot private companies in the secondary market.

On Wednesday evening, a photo-sharing app maker called Color opened a spigot of fuel onto the fire when it revealed that it had raised a whopping $41 million before even launching its product.

“Think I might have just heard the bubble pop,” said one of many bewildered tweets that followed the news.

“They may turn out to be the Water World of app startups” said another tweet, referring to the 1995, $175-million-budget Hollywood bomb.

The blog TechCrunch noted that Color’s funding represents the most money that VC firm Sequoia Capital has ever invested in any pre-launch company, including its initial investment in Google.

Apple’s shutting Lala, sets off iTunes plan speculation

That was quick.

Apple is shutting down Lala, the Web ‘cloud-based’ music service it bought last December for a rumored $80 million. It has been widely expected that Apple would eventually integrate the music service into the iTunes platform to offer a subscription service based in the cloud.

The speculation on various blogs is that such a service may still be in the works, although maybe not right away.

Apple as usual wouldn’t tell us what their plans are, but they did promise to refund Lala’s customers. Lala, if you remember, was founded by the irrepressible Bill Nguyen, a serial entrepreneur with the energy of a jack-in-a-box.  Just this month Nguyen has been showing off his amazing enviromentally-friendly surfing hideaway in Hawaii to the readers of WSJ Magazine.