Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Instagram Is Estimated to Be Worth More Than $100B

bloomberg.com

Post reply on HN
Print view View original

121–130 of 394 posts

Re: Instagram Is Estimated to Be Worth More Than $100B

#121

Post by IkmoIkmo »

petepete wrote: post #23
yathern wrote: post #3

Earlier quoted context omitted.

Because people use it? There's 1 billion monthly active accounts. And can be advertised to.

Is every user really worth $100 though? How many adverts would I need to click or watch to make up that number?

Doesn't work like that. Return rates on assets average about 6% or so. i.e., if you invest $100, you expect a $6 annual income. In other words, a $100b investment would expect a $6b annual income.

Take average PE ratios for example, about 15 (so 6.6% earnings as a percentage of market cap).

That would require about $6 per user per year in profit. Facebook is at $6 average revenue per user (ARPU) right now, but >$25 for US users for example, and growing.

Instagrams revenues are currently around $7b with a fraction of that profit, and at current growth rates, the valuation isn't crazy.

If the average user spends 1 hour per day, that's 365 hours per year at $5 or about 1 penny per hour of use. It's not hard to squeeze in a penny worth of profit from ads per hour of use. This would get you at $6b net income. Given that's in the cards for the future, the valuation isn't crazy.

The only flaw investors can make is that growth either isn't sustainable (I think it is for quite some time), or that Instagram users will eventually move on to other things (e.g. Myspace) such that the years of profit will be shortlived (more likely). Nobody invests $100 to gain $5 per year for a short period, that's based on perpetual income expectations which would require Instagram to stay around for quite a long time.

Re: Instagram Is Estimated to Be Worth More Than $100B

#122

Post by imsofuture »

tspike wrote: post #98
matte_black wrote: post #61

Earlier quoted context omitted.

If pictures are depressing you you might be following the wrong people.

To me, what's depressing is the amount of energy people spend proving their experiences were so amazing versus actually experiencing them.

This is a pretty narrow Instagram experience. I follow my actual friends who post random things from their life, and then people from a few different hobbies.

Except for watch people, none of it is carefully curated 'look at me' experiences. Watch people are another stripe though.... $20k on the wrist, $200k steering wheel.

Re: Instagram Is Estimated to Be Worth More Than $100B

#124

Post by rckclmbr »

394549 wrote: post #81
csomar wrote: post #60

I remember the outrage when Zuckerberg bought Insta for $1bn. The Internet was filled with bubble-theorist. Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains.

> Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains. Did he really predict that, or did he just see an upcoming potential competitive threat and buy it? I feel bad for the founders of Instagram. They could have been the next Zuckerberg(s) (as Instagram seems to be taking over as Facebook seems to be starting to fade), but i…

You should listen to the How I Built This podcast with Kevin Systrom and Mike Krieger. I think it's Kevin that said something like "I could keep doing what I'm doing the rest of my life. Work hard, build the company, but then what? At the end of it, I write a book about business? I want to enjoy my life". Definitely don't feel sorry for them, they met their goals.

Re: Instagram Is Estimated to Be Worth More Than $100B

#125

Post by drb91 »

csomar wrote: post #60

I remember the outrage when Zuckerberg bought Insta for $1bn. The Internet was filled with bubble-theorist. Say what you want about Zuckerberg but the guy was well ahead of his time and could see how things would evolve and what tick with people brains.

What makes you attribute this to Zuckerberg instead of Facebook?

Re: Instagram Is Estimated to Be Worth More Than $100B

#126

Post by slezakattack »

394549 wrote: post #89
slezakattack wrote: post #69

Earlier quoted context omitted.

Monopoly? In 2012, Instagram had 40 million users and no revenue[1]. Hardly a monopoly.. Everybody mocked Facebook for buying up Instagram for the amount of money they were offering. Nobody (or, perhaps, very very few amount of people) at the time thought it would become a $100bn company. You really think the government should have had the foresight to block this? Wishful thinking on your part.. [1] https://techcrunc…

>> And shame on the government for not doing any due diligence in trying to prevent this acquisition/monopoly. > Monopoly? In 2012, Instagram had 40 million users and no revenue[1]. Hardly a monopoly. I think you misunderstand. Facebook is the monopoly in the grandparent, not the independent Instagram. I believe the GP's point is that the government should have blocked FB's acquisition of IG, so IG could have provide…

I don't think I misunderstand. In 2012, there were quite a few up and coming social media apps. Twitter, Vine (2013), Tumblr, Pinterest, Snapchat (2011), and even Google+. Plenty of competition from both small and big companies. I'm not saying Facebook isn't a monopoly but given the options, you can't possibly think that at the time Instagram was going to be the "Facebook killer".

In hindsight, sure, we'd all love that. But seeing the recent FB hearings with congress, it seems they are still figuring out what the internet is.

Re: Instagram Is Estimated to Be Worth More Than $100B

#130

Post by glenneroo »

394549 wrote: post #101
csomar wrote: post #99

Earlier quoted context omitted.

> I feel bad for the founders of Instagram. That's like feeling bad for someone who sold bitcoins at $10. The company they sold was worth $1bn (to Facebook) at the time. It was not worth $100bn.

I also feel bad for us, as users, because social media (at least the friend-focused kind) is dominated by one dude's vision.

Facebook went public so they have a board of directors now, therefore I would assume Mark has to find ways to keep them happy as well. I would guess the general vision of Facebook is like most corporations, to make more money.
Post reply on HN