One way to look at it is that the money people paid for Instagram has already gone to Marco. What he's "selling" are potential future customers, subscriber fee

One way to look at it is that the money people paid for Instagram has already gone to Marco. What he's "selling" are potential future customers, subscriber fees, and ads. I don't know what the curve on user adoption looks like, but it seems like a smart choice from a financial point of view. It'll be interesting how this fits into the upcoming Digg RSS reader.