Facebook To Buy Instagram For $1 Billion

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Facebook To Buy Instagram For $1 Billion

Posted by Soulskill on Monday April 9, 2012 @05:29AM from the payday-at-the-instagram-office dept.

Dorduan writes with news that Facebook is buying Instagram, the company who makes the popular mobile photo-sharing app of the same name, for approximately $1 billion. Mark Zuckerberg wrote, "... in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook. That's why we're committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people. We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook."

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One Billion? by NeutronCowboy · 2012-04-09 05:34 · Score: 5, Interesting

OK, I have to admit it: I don't get it. What is it about Instragram that is worth $1Billion? Isn't it just a photo app with some built-in filters and sharing tools? Kinda like any other semi-advanced photo app?
So again - 1 $Billion? I mean, grats to the Instagram founders for cashing out in a massive fashion. But is this just another AOL? Is Facebook just grasping at straws in terms of trying to grow?

--
Those who can, do. Those who can't, sue.
1. Re:One Billion? by teh31337one · 2012-04-09 05:37 · Score: 4, Interesting
  
  Facebook may never make that $1b back, but it's still smart. Instagram was the only thing challenging their dominance in photo sharing. Via Twitter
2. Re:One Billion? by pympdaddyc · 2012-04-09 05:38 · Score: 3, Insightful
  
  Without disagreeing with the substance of your post ($1 billion does seem like a lot for what it is), in principle things like notoriety/brand recognition, patents, and existing user base all are worth money, much more than whatever time it would take for a competitor to build an identical system from scratch.
3. Re:One Billion? by aaandre · 2012-04-09 05:38 · Score: 5, Insightful
  
  The application details are a formality. The 30+million users are the product.
  Facebook is buying cattle fenced in by another app, and moving it within its world (where Google cannot reach :).
4. Re:One Billion? by alen · 2012-04-09 05:39 · Score: 4, Insightful
  
  1990's and prior - you had to buy and read magazines to get your celeb news
  21st century - celebs connect directly to fans via social networks
  the owner of the platform that owns this will have a huge opportunity in marketing
  look for pinterest to be bought next
5. Re:One Billion? by poetmatt · 2012-04-09 05:48 · Score: 5, Interesting
  
  Yep. this is a "purchase to shut it down.". Funny how things happened right around when they released for android (even though it's likely that this deal was in the works for months).
6. Re:One Billion? by Desler · 2012-04-09 05:50 · Score: 2
  
  What's funny about that? Facebook supports Android as well.
7. Re:One Billion? by edmicman · 2012-04-09 06:16 · Score: 3, Funny
  
  Facebook supports Android as well.
  Is that what you call it?
8. Re:One Billion? by brit74 · 2012-04-09 06:47 · Score: 3, Insightful
  
  Doesn't $33 per user seem a bit excessive to you?
9. Re:One Billion? by TheRaven64 · 2012-04-09 07:04 · Score: 2
  
  Remember that the Facebook T&Cs give them a nonexclusive, transferable, sublicenseable, commercial copyright license to anything you upload. They've started making money from selling photos that people upload, and I doubt this will stop any time soon...
  
  --
  I am TheRaven on Soylent News
10. Re:One Billion? by Anonymous Coward · 2012-04-09 07:08 · Score: 3, Insightful
  
  "Social" is a tough game. By the time it's clear that a competing platform is a threat, they'll have their own established brand and overinflated stock price.
  Presumably Facebook believe that a large number of their users use their accounts primarily for sharing photos with friends.If some other platform starts serving that need, they'll stop spending time on Facebook, and if the platform reaches critical mass, they'll start "dragging" other users over.
  Remember that ad revenues go up as users spend more time on their site. If people are sharing and browsing photos somewhere else, they're spending less time on Facebook, even if they still have an account.
  Thus there are two costs: the direct loss of ad revenue as people spend less time on Facebook, and the increased risk of a competitor gaining critical mass as people form networks outside of Facebook. It's safest to cull them while they are buds, but of course the start-ups know that, and demand a hugely inflated price.
11. Re:One Billion? by Anonymous Coward · 2012-04-09 07:39 · Score: 2, Informative
  
  I'm a former Android user who has just converted to iPhone, I can assure you that that iPhone Facebook app sucks just as badly as the Android one.
12. Re:One Billion? by dj245 · 2012-04-09 09:23 · Score: 3, Insightful
  
  It has also been shown that bubbles appear even when market participants are well-capable of pricing assets correctly.
  
  In other words, even if everyone knows its a bubble, they will propagate it anyway.
  
  --
  Even those who arrange and design shrubberies are under considerable economic stress at this period in history.
13. Re:One Billion? by goombah99 · 2012-04-09 10:16 · Score: 2
  
  Doesn't $33 per user seem a bit excessive to you?
  It's 30 million downloads of a free app. They would be lucky if they had even 1 million regular users. this is more like $1000 a customer. And I'd bet 90% of them already use facebook.
  SO that would be $10,000 per new customer.
  
  --
  Some drink at the fountain of knowledge. Others just gargle.
14. Re:One Billion? by stephanruby · 2012-04-09 10:39 · Score: 3, Informative
  
  The application details are a formality. The 30+million users are the product.
  Not just that. The Facebook IPO stock is also the product.
  And buying Instagram (for mostly what amounts to a stock swap) just before an IPO isn't as uncommon as you might think. Companies have been known to hire thousands of people for no other reason than trying to swell their headcount and ask for as much capitalization as possible for their IPO.
Decisions, decisions... by DdJ · 2012-04-09 05:34 · Score: 2

Delete the Instagram account, or just tombstone it?
Wonder how iPhone idiots will react to this? by teh31337one · 2012-04-09 05:34 · Score: 5, Funny

Here's their reaction to Instagram on android: http://www.androidpit.com/en/android/blog/404116/instagram-for-android
More here: https://twitter.com/#!/AndroidAGram
And my personal favourites:

The Bad Guy @DamnLes
Apple needs to stop whoever is converting their programs.. Now android have temple run and instagram.. its not special to have an iphone
Michael @Periphereality
@DamnLes I agree they need to stop the guy who keeps converting the iPhone apps! It should be illegal isn't it against copywright?!1
1. Re:Wonder how iPhone idiots will react to this? by samazon · 2012-04-09 05:43 · Score: 3, Insightful
  
  There are so many reasons I avoid Apple products (#1 being, I don't actually NEED a graphic design/video editing/print layout computer or other iGadget) and this has just been added to the list right underneath the idolatry thing.
  
  --
  I have the hiccups.
2. Re:Wonder how iPhone idiots will react to this? by maccodemonkey · 2012-04-09 05:48 · Score: 5, Insightful
  
  Spoiler alert: All the platforms have their idiots.
3. Re:Wonder how iPhone idiots will react to this? by TheNinjaroach · 2012-04-09 06:20 · Score: 4, Funny
  
  My roommate was telling me about some rather amusing quotes he read with regards to Android Instagram. Our favorite:
  
  Android has Instagram? Well that does it. Prepare to be flooded with pictures of ramen noodles and food stamps.
  
  --
  I went to eat some animal crackers and the box said, "Do not eat if seal is broken." I opened the box and sure enough..
4. Re:Wonder how iPhone idiots will react to this? by um...+Lucas · 2012-04-09 06:21 · Score: 2
  
  Sigh... I remember back when slashdotters LIKED Apple and looked forward to new releases from them.
  http://apple.slashdot.org/story/02/05/13/1245241/preview-of-mac-os-x-102
5. Re:Wonder how iPhone idiots will react to this? by samazon · 2012-04-09 06:23 · Score: 5, Interesting
  
  The problem is, it isn't isolated idiots. I have friends who are not "idiots" who are genuinely offended that "their" app is now available for use by people with Android phones. It's an Apple elitism that I, for one, refuse to be a part of. Some of my favorite tech bloggers swear by Apple (one even worked for them) and I don't hold it against them that they enjoy using and having the products, nor do I engage them in arguments/discussions about why I don't buy Apple products. The day that I absolutely need a Powerbook, iMac, iPod, iPhone, or iDon'tKnowWhatElse, is the day that I'll buy one, and not a moment sooner. Generally speaking, the people who use Apple products because they need them and not because of the Apple Cult of Personality are the ones who are the isolated (non-idiots) who don't think that they're better than everyone else because they spent half their paycheck on what amounts (for most people, again not including the class of people I am currently referring to) to a toy.
  
  --
  I have the hiccups.
6. Re:Wonder how iPhone idiots will react to this? by Anonymous Coward · 2012-04-09 06:39 · Score: 3, Funny
  
  i don't typically go all grammer nazi but isn't it supposed to be iDiots?
7. Re:Wonder how iPhone idiots will react to this? by Cederic · 2012-04-09 06:45 · Score: 2
  
  OSX did make me seriously consider switching to Macs. Then Apple went all controlling and I just don't like that.
8. Re:Wonder how iPhone idiots will react to this? by thesandbender · 2012-04-09 06:46 · Score: 4, Funny
  
  Yes... but everyone knows Apple revolutionized idiots and everyone else is just copying. (lovingly posted from my iMac)
9. Re:Wonder how iPhone idiots will react to this? by samazon · 2012-04-09 07:05 · Score: 2
  
  Sure it is. In my experience - as in, among the people I know - the ones who talk about how awesome their phone/tablet/etc is... are Apple users. I know some people who really like their Android phones, but none who get so pushy about how great their phones are as the iPhone users I know. Just by my experience.
  
  And also, when referencing my above post, you should know that I don't own a single gadget with an Android or Apple OS on it. I've used both, I keep both in mind when finishing products at work, but I am not a user (of any smartphone - because my cell phone is for calls and texts, and my computer is for everything else).
  
  The only Apple users who are idiots are the ones who spend money that they don't have on stuff that they don't need in order to "keep up with the Joneses."
  
  --
  I have the hiccups.
10. Re:Wonder how iPhone idiots will react to this? by maccodemonkey · 2012-04-09 07:07 · Score: 2
  
  Sure it is. In my experience - as in, among the people I know - the ones who talk about how awesome their phone/tablet/etc is... are Apple users. I know some people who really like their Android phones, but none who get so pushy about how great their phones are as the iPhone users I know. Just by my experience.
  One only has to wander over to the Engadget comments section for any article related to Android or iOS.
  
  The only Apple users who are idiots are the ones who spend money that they don't have on stuff that they don't need in order to "keep up with the Joneses."
  Again...
  
  Heck, Android users calling Apple part of a "Apple Cult of Personality" and "idiots" is a little snobby, don't you think?
11. Re:Wonder how iPhone idiots will react to this? by Anonymous Coward · 2012-04-09 07:14 · Score: 4, Funny
  
  I thought instagram and iphones were big in artist circles. Instagram should already be full of pictures of ramen noodles and food stamps.
12. Re:Wonder how iPhone idiots will react to this? by CrackedButter · 2012-04-09 08:02 · Score: 2
  
  Yes you are an idiot if you're going to give them the time of day with a response, why bother. I speak as a Mac user.
  
  --
  Jonathanjk.com
nosense by vlm · 2012-04-09 05:36 · Score: 2

We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook
None of that makes any financial sense. I'll bet 5 internets on a 2:1 basis that within a year "instagram" is merely the name of the icon replacing "take a picture" inside the facebook app and all of the instagram social media stuff is merged into facebook.
Its a pity, I was almost getting around to installing the android app, but now its like, why bother.

--
"Science flies us to the moon. Religion flies us into buildings." - Victor Stenger
1. Re:nosense by jeffmeden · 2012-04-09 07:27 · Score: 2
  
  We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook
  None of that makes any financial sense. I'll bet 5 internets on a 2:1 basis that within a year "instagram" is merely the name of the icon replacing "take a picture" inside the facebook app and all of the instagram social media stuff is merged into facebook.
  Its a pity, I was almost getting around to installing the android app, but now its like, why bother.
  Considering Instagram's "niche" is a low-res photo with a shitty filter, replacing the Facebook photo functionality with ANYTHING remotely like this is probably enough to make Facebook useless to an even larger contingent of the general public. Some people prefer, you know, SEEING what they just took a picture of...
Is Slashdot broken today? by readandburn · 2012-04-09 05:40 · Score: 5, Funny

This news is from earlier today, not from last week. I'm worried that Slashdot may be abandoning its roots.
1. Re:Is Slashdot broken today? by Bill+Hayden · 2012-04-09 05:46 · Score: 5, Funny
  
  Our apologies... We've scheduled a dupe for next week to rectify this problem. --The Management
  
  --
  Protect your browser with the Force Safe Search add-on
Account removal by Anonymous Coward · 2012-04-09 05:40 · Score: 3, Informative

In order to delete your Instagram account, please visit our Account Removal page:
https://instagram.com/accounts/remove/request/
Not Enough Time To Care by RapidEye · 2012-04-09 05:43 · Score: 2

Since it only came out on Android, I haven't had a chance to really care about it.
No problem uninstalling it as I type this.
Oh, and congrats to the guys that made it - sure got their payday!

--
"Murderer? Well, that's a harsh word. I prefer to think of myself as a Mortality Technician."
Re:Suuuure... right now by alexander_686 · 2012-04-09 05:44 · Score: 2

Context is important.
Sometimes when companies are bought they are absorbed completely. Brand names are dropped, software works well with parent company but no other, etc. It’s like when Apple bought a little computer company called Next. Want support for that old Next computer? Not so much – buy a Mac instead.
On the other hand, sometimes the brand is left “independent” in the sense that the parent’s brand is not stamped all over it. And it sounds like they are not requiring you to open a FaceBook account to continue to use Instagram. Now, will the two share data? Yeah, I am sure.
What's cooler... by Anonymous Coward · 2012-04-09 05:55 · Score: 5, Funny

What's cooler than paying a million dollars for a useless hipster app?
Paying a BILLION dollars.
Disturbance in Skinny Jeans by ThatsNotPudding · 2012-04-09 05:56 · Score: 3, Funny

And I felt a million hipsters cry out in non-ironic pain, now with no online shelter from their mothers.
Business Model by CuriousGeorge113 · 2012-04-09 06:01 · Score: 3, Insightful

1. Build a simple app.
2. Generate a substantial user base.
3. Make facebook feel threatened.
4. Profit!

--
No man is an island, But if you take a bunch of dead guys and tie them together, they make a pretty good raft.
1. Re:Business Model by thomasw_lrd · 2012-04-09 07:01 · Score: 4, Insightful
  
  Wait, are the early 90's back?
  1. Build a simple app
  2. Generate a substantial user base
  3. Make Microsoft feel threatened.
  4. Profit.
  
  --
  21st Century Renaissance Man
Re:Bubble? by Anonymous Coward · 2012-04-09 06:02 · Score: 2, Funny

Y u no understand powers of 10?
Patents? by edmicman · 2012-04-09 06:25 · Score: 2

Anything? Does Instagram have any sort of lock on "Implementing digital image filters on a mobile phone" or something that would explain a $1 bil valuation? Seeing how there's a ton of ripoff apps I wouldn't think so but you never know. Couldn't Facebook have made something in-house and have it automatically Just Work for their existing users, most I assume who are a cross section from the Instagram users?
1. Re:Patents? by toriver · 2012-04-09 07:32 · Score: 2
  
  No, I have at least five others on my iPhone: Hipstamatic, Plastiq, Infinicam, Lo-mob and Fusioncam. Instagram's claim to fame was the (largely Facebook-driven ironically) community functions.
Equallity? by chinton · 2012-04-09 07:27 · Score: 4, Insightful

So, 1 Instagram == 800 AOL Patents?
Re:Bye-bye Instagram... by allo · 2012-04-09 07:28 · Score: 2

not enough domains. think of all the connect-stuff and fbcdn and such related sites.
This are even the wrong domains. www.facebook.com is the harmless one, which is only active, when you WANT to visit facebook. the other subdomains and other domains are the ones tracking you on the web via facebook-comments, like-buttons, etc.
Shit. by tburke261 · 2012-04-09 07:40 · Score: 2

Source- http://tmblr.co/ZIw7uxJNDWSA
I’m going to go out and say it. I’m tired of Facebook acquiring startups I like. While I haven’t been a huge Instagram user, I use it a few times a week and appreciate the simplicity, design, functionality and community of the application. Unlike some I know the Android App launch didn’t bother me, the more platforms the merrier-I’m certainly no iOS snob. In fact, instagram is one of the few things that kept me from switching to Android (iTunes, Genius and iMessage among them).
It’s just a hunch, but I think that the feel of Instagram will degrade with Facebook. The simple sharing options will become encumbered by the confusing and needlessly complicated sharing and privacy options Facebook offers. Going from an app that does only one thing well to getting sucked up into the Facebook ecosystem won’t turn out well. Those that choseInstagram expressly because they don’t like Facebook will leave. Yet I still have to say congrats to the guys at Instagram, $1 Billion for a couple years work and only 8 employees at last count is phenomenal.
Maybe I like my separation, but I am no fan of the new Social Sharing/Reader feature, and you won’t find my Netflix, Hulu, Spotify or 4 Square accounts connected to Facebook. I keep it as a necessary evil, for those old friends I occasionally want to keep in touch with. For me the Google+ sharing model is worlds better, but G+ has no hope of success without a community behind it, and I still see no reason to visit it regularly.
Instagram won’t keel over in 6 or even 12 months, but I think those that truly appreciated it, the early adopters and the hardcore ‘iPhone Photographers’ will eventually leave indisgust. I could be wrong.
What do you think?
Re:Bye-bye Instagram... by oztiks · 2012-04-09 08:25 · Score: 3, Interesting

Let me get this straight $1b for some freaking iPhone app? really? a free one? Who on earth gave these people money in the first place? and then let them go off and use that free money they received to buy a free app which apparently someone somewhere said was worth $1b?
I really need to rethink this whole doing something tangible in order to actually make money concept. Perhaps look towards the do something miniscule but make it look like it was tangible department? any ideas?
Bubbly by slasho81 · 2012-04-09 09:26 · Score: 2

Does Instagram make any money?
A genuine hearty lol by AbRASiON · 2012-04-09 13:32 · Score: 2

Now all the hipsters fucking up their photos with utterly stupid filters can share them easier on facebook!
I mean we are talking about the internet elite here aren't we? The same idiots who said (and I quote) "ew" regarding Android users using their service.
https://www.google.com.au/search?q=iphone%20user%20backlash%20over%20android%20instagram&hl=en&meta=#hl=en&sclient=psy-ab&q=iphone+user+backlash+over+android+instagram+-facebook&oq=iphone+user+backlash+over+android+instagram+-facebook&aq=f&aqi=&aql=&gs_l=serp.3...12799l14431l0l14564l10l10l0l0l0l0l433l1937l0j2j5j0j1l8l0.frgbld.&pbx=1&bav=on.2,or.r_gc.r_pw.r_qf.,cf.osb&fp=58b7f9b5dc851469&biw=1528&bih=759
Honestly, I cant' think of 2 groups better suited to hang with each other, it's utterly perfect. Elitist Apple idiots with terrible taste in photography and narcissists.
Re:Thanks facebook! by Swampash · 2012-04-09 15:23 · Score: 2

The photo filters are a gimmick to get people to play with the app. The social functions are where Instagram's real value lies. Photo sharing with friends from PCs is what made Facebook the juggernaut it is today, but this is the post-PC era, and Facebook is shit on phones. Instagram on the other hand is awesome. Instagram doesn't even have a desktop interface for the network, that's how mobile-centric it is.
So, Instagram is:
A. An Internet social network (what Facebook does), and;
B. Awesome on phones (which Facebook isn't), and;
C. Based around social sharing of photos (that thing that made Facebook huge).
The acquisition seems pretty sensible.