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Facebook acquires Instagram

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Re: Facebook acquires Instagram

#241

Post by beambot »

tptacek wrote: post #139
untog wrote: post #135

Earlier quoted context omitted.

This seems ominous for Google, which spent $12.5bn for Motorola to stake a shaky claim in mobile I was under the impression that Google paid that price (and, indeed, bought Motorola at all) for patents. Google is doing just fine out of Android. iOS may be better marketed, but there are a hell of a lot more Android phones out there.

The game is scored in profit. Revenue and market share matters only as a means to the end of securing profits. Android has a huge market share (and, dearly bought), but even 1st & Goal doesn't matter unless you actually score. I don't keep super close track, so maybe Apple's commanding profit share lead is eroding sharply. Last I checked, "commanding" was indeed the word for it. Again, all I'm saying is that you can…

The game is scored in profit.

I'm all for capitalism, but that statement strikes me as particularly narrow-sighted -- with due respect for tptacek (since I always find your comments insightful). Plenty of people and corporations are not purely motivated by profits. For example, kudos to GOOG for making a cheap smartphone OS available to the 3rd world.

Re: Facebook acquires Instagram

#242

Post by waterlesscloud »

nirvana wrote: post #118
marcamillion wrote: post #96

Earlier quoted context omitted.

I think the mere fact that they just raised $50M @ $500M valuation is the reason that this price is so high. Those investors in that round had to at least double their money...if the price was indeed $1B, that's all they did. Just 2X. Although, the argument can be made that a 2X return in 1 - 2 months isn't bad...but then again, VC funds don't have a 2 month life, so over the long-term value (i.e. 10 years most-times…

The acquisition was in stock and cash. So the VCs that put up the $50M may have just gotten $100M in pre-IPO Facebook stock, which may well dramatically increase their return post IPO.

This has to be mostly stock...how much cash does FB even have? Enough to casually hand out hundreds of millions?

Re: Facebook acquires Instagram

#243

Post by iscrewyou »

You know what I'm afraid of? Facebook doing to Instagram what they did to Beluga. At work, we used Beluga to communicate about work related stuff. Facebook bought it, shut it down and turned it into Facebook Messenger. Goes without saying but we didn't move our conversations/groups over to Facebook Messenger. I really hope Instagram doesn't get treated the same way. That's all.

Re: Facebook acquires Instagram

#244

Post by dkrich »

orblivion wrote: post #159
2pasc wrote: post #63

Earlier quoted context omitted.

I agree...but the point was not about the revenues, the point was about making sure that when you think about photos - to share or to browse(which is the most used app on Facebook), you think about Facebook. The risk of being displaced by Instagram on that crucial activity was too high for Facebook.

So Facebook is like giant a rail company in the late 1800s.

Except that in the 1800's you couldn't build another B&O in six months with a couple of nerds with Macs.

Re: Facebook acquires Instagram

#246

Post by pavel_lishin »

pbhjpbhj wrote: post #240
amirhhz wrote: post #83

Earlier quoted context omitted.

When I read the headline I thought two things: a) Wow, the Instagram guys deserve it, congrats to them. b) I need to delete my account. The second point is because I have been actively trying to avoid giving fb more data than absolutely necessary. No ill will towards Instagram.

> I need to delete my account // Surely it's already too late. They bought your data. Why do we allow companies to sell personal data on as part of the company? Should this be legislated against?

What's the alternative?

Re: Facebook acquires Instagram

#247

Post by gammarator »

kooshball wrote: post #174
ChuckMcM wrote: post #146

Earlier quoted context omitted.

100% return in 3 months (it won't close to the end of the quarter) is an annualized 400% return. If you're a VC you took $50M out of a fund put back $100M, now you can make 2 bets at $50M when before you only had one. I don't see any way that this isn't a great deal for the VCs. That being said, this wasn't part of the S-1 and Facebook really has to tell potential investors how this will affect the financials, so pre…

Like everyone else already said, VCs can't reinvest so they dont really want 2x returns. Anyways, there's a excellent blog post that explains this very clearly. It is written for founders to understand the VC's perspective when investing. Does anyone know what I"m talking about?

http://www.danshapiro.com/blog/2010/08/vc-insanity-economics...

Re: Facebook acquires Instagram

#248

Post by unreal37 »

dirtyaura wrote: post #232
knowsnothing613 wrote: post #208

Earlier quoted context omitted.

yeah, but they paid $1 BILLION dollar for a company with NO business model. This buy was just another way for connected Silicon players to cash out on the facebook IPO, since the IPO window for web 2.0 is closed.

Google bought YouTube for $1.65B when YouTube didn't have business model. It was critiqued a lot because of this, but it established Google as a dominant player in video space and it's ripest fruits might be seen in coming years when media consumption moves more and more to mobile. I grant that $1B sounds a lot for Instagram and it is harder to see similar commercial value in photos than in videos. My personal take i…

Trust me, Youtube is very profitable. Major multi-national brands have to pay $100,000's in Google Adword purchases to have their own branded channel. And if you want to change the look of your channel? Pony up another $100K.

Re: Facebook acquires Instagram

#249

Post by farmdawgnation »

amirhhz wrote: post #83
kylec wrote: post #18

Some of you might find this useful: https://instagram.com/accounts/remove/request/

When I read the headline I thought two things: a) Wow, the Instagram guys deserve it, congrats to them. b) I need to delete my account. The second point is because I have been actively trying to avoid giving fb more data than absolutely necessary. No ill will towards Instagram.

It makes me wonder how many people are going to have that reaction. I'm an Android owner and I still haven't checked out Instagram, and now I'm not sure I want to.

Re: Facebook acquires Instagram

#250

Post by shingen »

waterlesscloud wrote: post #242
nirvana wrote: post #118

Earlier quoted context omitted.

The acquisition was in stock and cash. So the VCs that put up the $50M may have just gotten $100M in pre-IPO Facebook stock, which may well dramatically increase their return post IPO.

This has to be mostly stock...how much cash does FB even have? Enough to casually hand out hundreds of millions?

Facebook has $4 billion in cash on hand (pre IPO).
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