Slashdot Mirror

← Back to Stories (view on slashdot.org)

Zuckerberg Made Instagram Deal Alone

Posted by samzenpus on from the going-solo dept.

benfrog writes "According to the Wall Street Journal, Facebook's Board of Directors was all but out of the picture when Mark Zuckerberg struck the $1 billion deal to purchase Instagram, the yet-profitless photo-sharing service. From the article: 'It was a remarkably speedy three-day path to a deal for Facebook—a young company taking pains to portray itself as blue-chip ahead of its initial public offering of stock in a few weeks that could value it at up to $100 billion. Companies generally prefer to bring in ranks of lawyers and bankers to scrutinize a deal before proceeding, a process that can eat up days or weeks. Mr. Zuckerberg ditched all that. By the time Facebook's board was brought in, the deal was all but done. The board, according to one person familiar with the matter, 'Was told, not consulted.'"

11 of 307 comments (clear)

  1. and this is how... by mozumder · · Score: 5, Insightful

    bubbles begin: when non-financiers with access to lots of money decide to make financial decisions.

    1. Re:and this is how... by Anonymous Coward · · Score: 5, Insightful

      Ya, good thing it wasn't experienced financiers making financial decisions regarding mortgage derivatives that caused a huge housing bubble and subsequent destruction of the economy a few years ago.

    2. Re:and this is how... by TWX · · Score: 5, Insightful

      I don't think that the Cloud stuff is a bubble so much as it's a fad way of renaming existing technologies under one umbrella label.

      You also have something different in Cloud, in that businesses actually have a product if they're offering Cloud services, whereas dotcom companies generally did not.

      --
      Do not look into laser with remaining eye.
    3. Re:and this is how... by Nimey · · Score: 5, Insightful

      Horseshit. The quants may have made it possible, but it was the beancounters higher up who made the decisions.

      --
      Hail Eris, full of mischief...

      E pluribus sanguinem
    4. Re:and this is how... by V-similitude · · Score: 5, Insightful

      We are not in another tech bubble. There are certainly isolated instances of overvaluation, but overall, there isn't a consistent pattern of it. Take Groupon for instance. It's almost certainly headed for failure, but people have pretty much already caught on to that and the stock has already receded from its IPO. In fact, it never really enjoyed a large and long stock burst that you'd expect in a bubble. Pandora is also well below its IPO. Facebook, while well overvalued at $100B in my opinion, seems to have a solid revenue and profit stream and isn't particularly indicative of a bubble (though buying Instagram at $1B certainly doesn't make me want to be an investor, long term).

      I think there was some realistic fear of a tech bubble back before any of these "sexy" IPOs actually took place and people seemed overly eager for them. But with a little bit of bubble-fear from the media, people seem to have stepped back and are respecting true valuations again . . . more or less.

      And yeah, Zuckerberg making a dumb (or more probably, cronyism-based) decision for his company is neither here nor there.

    5. Re:and this is how... by oxdas · · Score: 5, Insightful

      The politicians, funded by the investment bankers, made it possible. It was a really bad idea to tie investment banking to retail banking in the 1920's and a bad idea today. The investment bankers created investments out of the mortgage pools and sold them off by risk (with the top being AAA). This meant that more groups could buy shoddy mortgages (some organizations required AAA investments) and get a higher return. More money flooding into the system meant pressure to make more loans (and more fees). Without any vested interest in the loans (the banks were just going to sell them anyway), oversight became lax. Once that wall was broken down between investment and retail banking in the 1990's, bubbles with traditional retail banking assets were inevitable.

      I worked for a large finance company during that time (just a harmless middle manager, so don't blame me). We had all our clients money market assets in "AAA" mortgage backed securities. We made 6% and paid 0.25% return to our clients. Life was good (until it all came crashing down). So, I guess greed is what really made it possible.

  2. Not buying into Facebook IPO by Anonymous Coward · · Score: 5, Insightful

    Mr. Z seems to be a bit immature. Maybe this was an amazingly clever purchase, but it strikes me as a childish exercise in spending. Assuming he retains control of FB after the IPO I don't expect that the company will fare well or spend cash well. IMHO..

  3. Re:I'm confused by icebraining · · Score: 5, Insightful

    Actually,

    Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom's opening number, $2 billion

    Two billion dollars for a photo sharing social network with no business model /facepalm.

    --
    Dilbert RSS feed
  4. Re:Was told, not consulted. by gstrickler · · Score: 5, Insightful

    It's not a bad idea, but it's a terrible implementation. It should be a textbook example of what not to do in the field of information presentation. It puts form over function, makes it difficult to read, hard to find info, and makes terrible use of screen space.

    Aside from that, it's just fine.

    --
    make imaginary.friends COUNT=100 VISIBLE=false
  5. Re:I'm confused by Anonymous Coward · · Score: 5, Insightful

    This acquisition wasn't about the technology, it was about a desirable user population interacting on something that was not Facebook.

    If you're looking for a historical analogy, Yahoo buying GeoCities for billions in stock is probably a good fit.

  6. Re:Was told, not consulted. by cffrost · · Score: 5, Insightful

    If you [...] on [...] Facebook [...] you get what you deserve.

    Here's a succinct version with a wider margin of safety.

    --
    Thank you, Edward Snowden.

    "Arguments from authority are worthless." —Carl Sagan