Comment on Instagram's Success

[Rain]

I haven't researched all the details regarding Facebook's purchase of Instagram a while back, but I do know that Instagram did not have revenue, did not have a plan to generate revenue, and that Facebook paid $1 billion for it nonetheless. I also understand that it's quite a task to get ~30 million people to download your app, even if it's free. And I know it's a little late and doesn't really matter anymore, but...

I think Facebook could have easily thrown $100 million at the founders--and they would have sold.

Thoughts?

 

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[crlerk]

In the tech industry acquisitions often are talent driven, which is the case here.
What Zuckerberg really did was buy the leading social image sharing platform, and the team that built it, which will make facebook much stronger in that space even if they let instagram live as a separate service.

Also the $1B is not just cash, I read on TC that they are getting paid around $300M in cash and the rest in FB stocks, lol.

 

[oddball]

I don't think the founders would have taken 100mil. He originally wanted 2B for it. Overvalued is an understatement but its hard to get an app to have the following that instagram has. It would take a couple years minimum to try and mimic it with hopes to having the same success, easier to just buy it.

 

[MCaruso]

I think it was definitely grossly overpaid. Then again it looked like Facebook wanted to come in and set an example that their still the leader in the industry and show how much they will pay if they really want something. I don't think 100M would have worked, but probably 500M would have done the trick

 

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[JaySoriano]

The crux of a social network is photos, plus at the time of the announcement, Facebook didn't make a penny from mobile.