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I read that title as kind of tongue in cheek. I'm pretty sure Facebook could have built the exact same functionality for less money and in less time as it took

I read that title as kind of tongue in cheek. I'm pretty sure Facebook could have built the exact same functionality for less money and in less time as it took to initiate and finalize the acquisition. Winning their users over may have been harder to do. I guess they just figured it would be easier to just buy the users. shrug

bigiain 15y ago
Agreed. Also a pretty topical rebuttal to the other flood of articles claiming they were bought purely for the users - widely reported as being valued at $37 each, a number arrived at by assuming there's absolutely nothing else of value in the transaction. Given the "prices" Google are rumored to be paying to acquire great engineering staff, a team of three engineers who've got a proven track record of building and supporting 100million users on their own - surely they'd be worth some not-down-in-the-noise-floor percentage of even the seemingly insane valuation here? And a founding team who've "created" $1billion in value in ~550 days? Even if you only credit them with last weeks $500mil rumors - surely that founding team would be worth several tens of million dollars even if you didn't get the company they founded?
- Retric 15y ago
  They also had ~50 million in the bank after a funding round that was so recent they could not have spent much of the money. Which means FB got a 5% discount on that billion dollar price tag and helps to make all those estimates just that much more reasonable.
  - ajslater 15y ago
    Didn't Sequoia make a big YouTube investment suspiciously immediately before acquisition?
- watmough 15y ago
  This is one user that will be deleting this off of his phone. Darn-it!
- prof_hobart 15y ago
  Paying $1B for a company partly because they've "created $1billion in value in ~550 days" is a bit of a tautological line of reasoning.
nostromo 15y ago
I can't see this as a user acquisition play. The number of Instagram users that are already on Facebook must be, what, 90%? Maybe more? So, it's obviously not for talent ($100mm per head? no way...), users, or tech. That leaves it as a competitive play. They took Instagram off the market to keep it out of the hands of Apple and Google.
- sakri 15y ago
  Whether it's acquisition or retaining, every user owns an expensive phone, the demographic advertisers lust for.
- jack-r-abbit 15y ago
  But to keep what out of the hands of Apple and Google? Apple and Google don't need the talent or tech either. Instagram's only real value was users. Competitive play or not... it had to be for the users. What else is there? Break room snacks?

bigiain 15y ago

Agreed. Also a pretty topical rebuttal to the other flood of articles claiming they were bought purely for the users - widely reported as being valued at $37 each, a number arrived at by assuming there's absolutely nothing else of value in the transaction. Given the "prices" Google are rumored to be paying to acquire great engineering staff, a team of three engineers who've got a proven track record of building and supporting 100million users on their own - surely they'd be worth some not-down-in-the-noise-floor percentage of even the seemingly insane valuation here? And a founding team who've "created" $1billion in value in ~550 days? Even if you only credit them with last weeks $500mil rumors - surely that founding team would be worth several tens of million dollars even if you didn't get the company they founded?

Retric 15y ago
They also had ~50 million in the bank after a funding round that was so recent they could not have spent much of the money. Which means FB got a 5% discount on that billion dollar price tag and helps to make all those estimates just that much more reasonable.
- ajslater 15y ago
  Didn't Sequoia make a big YouTube investment suspiciously immediately before acquisition?
watmough 15y ago
This is one user that will be deleting this off of his phone. Darn-it!
prof_hobart 15y ago
Paying $1B for a company partly because they've "created $1billion in value in ~550 days" is a bit of a tautological line of reasoning.

nostromo 15y ago

I can't see this as a user acquisition play. The number of Instagram users that are already on Facebook must be, what, 90%? Maybe more? So, it's obviously not for talent ($100mm per head? no way...), users, or tech. That leaves it as a competitive play. They took Instagram off the market to keep it out of the hands of Apple and Google.

sakri 15y ago
Whether it's acquisition or retaining, every user owns an expensive phone, the demographic advertisers lust for.
jack-r-abbit 15y ago
But to keep what out of the hands of Apple and Google? Apple and Google don't need the talent or tech either. Instagram's only real value was users. Competitive play or not... it had to be for the users. What else is there? Break room snacks?