Apr 22, 2015 · 3 minutes

Path might sell off its social networking application to KakaoTalk, a mobile chat service popular in Asia, "multiple sources familiar with the deal" tell Recode.

The deal is said to be motivated by the popularity of Path's social service in Indonesia, where the majority of its 30 million active users live. This would give KakaoTalk more influence in its most important market while also allowing Path to ditch a service that never gained much traction in Western markets.

Path's traction in Indonesia has always been a point of contention. As Pando explained when the company touted this popularity after a series of setbacks:

This after the company lost several key senior executives last fall, fired 20 percent of its staff in a self-described “realignment,” and raised just $25 million in a badly needed Series D round funding (from a controversial Indonesian firm) after setting out to raise double that, and at a reported sub-$400 million valuation, fell well shy of its targeted 2X bump over its $250M Series C value.

The best thing you can say about Path today is it’s huge in Indonesia. The worst: The company seems to have accepted this as its fate. It may be the beginning of the end for a company that was once offered $125 million to sell to Google – in a high priced acquihire – less that six months into its existence and before the company even launched. This isn't the first time Path has been rumored to sell off its original app. Pando reported in September 2014 that Apple was interested in acquiring the service, which would be "incorporated, in whole or in part, into Apple’s newly refreshed Messages app" as part of an effort to bolster Apple's social networking prowess.

Washing its hands of a social networking service that's mainly popular in a growing-but-hard-to-monetize market would allow Path to focus on Path Talk, a service which allows its users to text someone at a call center who makes reservations, asks questions, and otherwise interacts with nearby businesses.

Path Talk is a fascinating tool. I've used it a few times -- far more often than I ever used Path once the "Look, it's so pretty!" buzz died out -- and have always been impressed with how much more convenient it is than making the call myself. (Consider it a dramatized example of the so-called "shut-in economy.")

Yet even that service is threatened by Facebook Messenger, which was recently updated to allow businesses to send receipts, tracking information, and other relevant data to consumers via Facebook instead of through a bunch of emails. As I wrote when Facebook revealed this feature at its F8 developer conference:

Messenger won’t be as convenient as Path Talk, at least not to start. Businesses have to decide how they want to use the new communication platform; many businesses have probably interacted with Path Talk without even knowing it. (Consumers can message some businesses directly through Path Talk, but I suspect most conversations are with Path’s own employees.)

But Messenger has something Path Talk can’t compete with: a billion monthly users and global brand awareness. Making use of Path Talk requires people to first hear about the app, install it, and remember where they put it if they buried it in one of their smartphone’s folders. Using Messenger requires people to use an app they’ve probably already downloaded and are likely to use every day. Perhaps selling off the Path social network would allow Path (the company) to focus on preparing Path Talk for this kind of battle. The company declined to comment on Recode's report, despite an earlier pledge by chief executive Dave Morin to be more transparent, and didn't immediately respond to an email.

[illustration by Brad Jonas[