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Once Mocked, Facebook's $1 Billion Acquisition of Instagram Was Genius (bgr.com)
anderzole writes: "In April of 2012, Facebook shocked the tech world when it acquired Instagram for $1 billion," reports BGR. "At the time, the acquisition raised quite a few eyebrows, along with many more questions than answers. Not only did people wonder how Instagram would fit into Facebook's existing business, many also questioned if Facebook CEO Mark Zuckerberg had lost his mind by outlaying $1 billion for a company that, at the time, had no revenue." Nearly five years later, Facebook's Instagram acquisition
"not only looks like a bargain, but a full-fledged stroke of genius."
Today Instagram still shows no signs of slowing down. Instagram's active user base jumped from 500 to 600 million in just the last 6 months alone, marking its fastest growth rate ever. "Incredibly, Facebook saw the long-term potential and impact of Instagram and managed to swoop in and acquire the company long before its user base began to accelerate wildly," writes BGR. "From an economic standpoint, Instagram is already paying dividends via highly targeted and lucrative ads. During the first quarter of 2016, for example, it was estimated that revenue from Instagram checked in at $572.5 million and accounted for 10% of Facebook's overall revenue. In fact, analysts at Credit Suisse believe that Instagram will have delivered $3.2 billion in revenue for Facebook by the time 2016 comes to a close. That's not bad for a $1 billion acquisition that Facebook is still in the relatively early stages of monetizing."
Instagram was also the second-fastest growing app of 2016, increasing its user base by 36% in just 12 months.
Today Instagram still shows no signs of slowing down. Instagram's active user base jumped from 500 to 600 million in just the last 6 months alone, marking its fastest growth rate ever. "Incredibly, Facebook saw the long-term potential and impact of Instagram and managed to swoop in and acquire the company long before its user base began to accelerate wildly," writes BGR. "From an economic standpoint, Instagram is already paying dividends via highly targeted and lucrative ads. During the first quarter of 2016, for example, it was estimated that revenue from Instagram checked in at $572.5 million and accounted for 10% of Facebook's overall revenue. In fact, analysts at Credit Suisse believe that Instagram will have delivered $3.2 billion in revenue for Facebook by the time 2016 comes to a close. That's not bad for a $1 billion acquisition that Facebook is still in the relatively early stages of monetizing."
Instagram was also the second-fastest growing app of 2016, increasing its user base by 36% in just 12 months.
i need to get all of instagram's domain names and add them to the list of addresses for my hosts file to block
Politics is Treachery, Religion is Brainwashing
is still in the relatively early stages of monetizing.
i.e. they haven't pissed off their userbase enough yet. Nothing on the internet follows a linear growth curve forever. Remember AOL? MySpace?
Facebook is suffering from its own success. It's now a cesspool that has combined 'forwards from Grandma' and the Eternal September. Read the comments on any 'news' story. Worse is most people will say that with their real name attached.
instagram is nothing more than a 21st century version of the 20th century celeb magazines in the supermarket checkout lane. only difference is the cost of entry is low where anyone can build a small following posting non-stop selfies and other photos to sell yourself.
And people thought that the Smalltalk post read like an ad. There's no use for articles only interested in only covering the upsides to a situation.
From 500 to 600 million is a factor of 1.2 million!
"Instagram is already paying dividends via highly targeted and lucrative ads."
Remember when businesses used to make money by offering something of value to customers?
Seems more like a "Which was First" type scenario. Would have Instagram have increased its user base if not for Facebook? I doubt it. It’s really less about “genius” and more about what FB can do with 1.2B users.
Even if it was a total flop, a $1 billion flop would still look brilliant compared to Microsoft buying LinkedIn... or Microsoft buying Nokia... or... Microsoft buying aQuantive... or... well, whoever ends up actually buying Yahoo, because even Microsoft learns from their mistakes.
Log in or piss off.
One billion pictures of what people ate for lunch may have information content but is it valuable?
Some drink at the fountain of knowledge. Others just gargle.
FB certainly could have replicated Instagram for a lot less than a billion dollars. What they've done with it since the acquisition doesn't change that fact.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
> FB certainly could have replicated Instagram for a lot less than a billion dollars
Maybe. Microsoft tried to build a social network and failed (so.cl). Google tried and failed (Google+). Facebook did manage to build one social network successfully, but there's little certainty that they could build another one and have success.
As someone else said, they could build most of the SOFTWARE the powers the site for several thousand dollars, but that's not where the value is.
... that instagram and the entertainment social networks have peaked and will now start to decline. Unlike past inventions like email, instagram's, and to a lesser degree, facebook's, utility is limited. I have unfollowed almost everyone on my facebook feed and haven't posted on my wall in weeks, although I still occasionally comment on other posts. Having experienced that feeling I don't plan to go ever go back.
Now how would Facebook know how popular Instagram is?
Incredible.
It's not "many also questioned if Facebook CEO Mark Zuckerberg had lost his mind by outlaying $1 billion for a company that, at the time, had no revenue". It's because this is Facebook, and no one wants Facebook to acquire Instagram except Facebook and Instagram themselves.