Facebook acquires Instagram • Hacker News Board

Re: Facebook acquires Instagram

#341

Post by slackerIII » Tue, Apr 10, 2012, 4:43 AM UTC

marcamillion wrote: post #333

TomGullen wrote: post #319

Earlier quoted context omitted.

Sorry if I came off crass, my point is that people throw 'stock tips' like this around without care and it's generally bad advice and you have to understand some people reading it may act on it. Someone could read what you wrote and buy stock when your actual reasoning is simply because you think the public are going to get excited and buy the Facebook stock because they use it, along with the big assumptions that a)…

You didn't come off crass...not to me anyway. I wasn't giving a stock tip. Just stating what I see as the most obvious conclusion. That being said, if I had a net worth of any significant value that wasn't illiquid, I would probably buy FB stock on IPO and hold it for a few years. I can't see why you wouldn't want to. They have not really monetized, they have 800M+ users and they are already doing $1B/profit per year…

Yes, but is any of that not already priced into the stock? The folks who have been buying and selling huge chunks of FB stock for the last few years have done a lot of thinking about that sort of thing.

Re: Facebook acquires Instagram

#342

Post by bigphishy » Tue, Apr 10, 2012, 4:54 AM UTC

damoncali wrote: post #77

tptacek wrote: post #25

Earlier quoted context omitted.

I feel like I can safely declare that there is no such thing as a one billion dollar talent acquisition.

Perhaps they found Instagram threatening. I'm betting they kill it now that they own it.

The consensus seems to be that FB was more threatened by the prospect of google aquiring instagram than an independent instagram. Still though, that's a pretty penny to spend.

Re: Facebook acquires Instagram

#343

Post by nivertech » Tue, Apr 10, 2012, 5:03 AM UTC

marcamillion wrote: post #333

TomGullen wrote: post #319

Earlier quoted context omitted.

Sorry if I came off crass, my point is that people throw 'stock tips' like this around without care and it's generally bad advice and you have to understand some people reading it may act on it. Someone could read what you wrote and buy stock when your actual reasoning is simply because you think the public are going to get excited and buy the Facebook stock because they use it, along with the big assumptions that a)…

You didn't come off crass...not to me anyway. I wasn't giving a stock tip. Just stating what I see as the most obvious conclusion. That being said, if I had a net worth of any significant value that wasn't illiquid, I would probably buy FB stock on IPO and hold it for a few years. I can't see why you wouldn't want to. They have not really monetized, they have 800M+ users and they are already doing $1B/profit per year…

I understand when a startup, like Instagram acquiring eyeballs and saying: "we really don't have a business model, but when somebody will acquire us - they surely will figure this out".

But when Facebook saying "we didn't really started to monetize our 800M eyeballs, we just waiting for IPO and will figure it's later" - it's sounds silly.

Re: Facebook acquires Instagram

#344

Post by corin_ » Tue, Apr 10, 2012, 5:26 AM UTC

niels_olson wrote: post #327

wallawe wrote: post #167

Earlier quoted context omitted.

But back to the original proposition, is this indicative of a bubble when you drop 1 Billion, or >1% of your estimated market cap on a preventive/defensive measure?

you ever play chess? A pawn is 2.6% of your game's value.

I daresay that's true, but not exactly relevant. I've also played blackjack, roulette, rock/paper/scissors, and I'm not sure if logic and tactics that work in games are always valid business plans...

Re: Facebook acquires Instagram

#345

Post by mkramlich » Tue, Apr 10, 2012, 5:27 AM UTC

georgespencer wrote: post #307

achompas wrote: post #181

Earlier quoted context omitted.

Instagram is a photo service in a sea of other photo services. You're mischaracterizing Instagram. It's not "a photo service," it's the photo service. 30M iOS users plus 1M new Android users in 12 hours. [0] Instagram is the main mobile photo app. With this purchase, Facebook strengthens their mobile position the way Google strengthened their content position with YT. The acquisitions are very similar. (edited for a…

It isn't the photo service: Facebook. Flickr. Picasa. Imageshack. Twitpic. Imgur... To name a few. Instagram doesn't have more users than Facebook. Hell, it doesn't even have more users than Flickr (51m) or Photobucket (50m). Instagram is a small part of the web photo ecosystem. It's a very peculiar play by Facebook, and not at all comparable to Google & YouTube other than the fact that Google acquired YouTube, and F…

It's probably too late, but if Facebook would like to hedge their bets by seeing if they could make an Instagram workalike & user traction for much much less than $1B -- for say, oh, a mere $1M up front and $9M upon delivery -- I'd be willing to take a shot. One man team. Give me say 2 months absolute tops. I deliver the mobile app, website, backend. Facebook brings the massive user base. Oh wait, again, they could already do this, without needing me. Or Instagram. So, put me down as another guy who thinks it's a misspend on Facebook's part, partly due to perhaps being drunk on their own "funny money" valuations.

Re: Facebook acquires Instagram

#346

Post by guynamedloren » Tue, Apr 10, 2012, 5:29 AM UTC

A billion dollars is an interesting sum. Any bets on whether the Instagram founders told Mark Zuckerburg,

"A million dollars isn't cool. You know what's cool? A billion dollars."

That'd be epic.

Re: Facebook acquires Instagram

#347

Post by mkramlich » Tue, Apr 10, 2012, 5:29 AM UTC

Toddward wrote: post #26

jsm386 wrote: post #9

According to WSJ price is $1B source: http://allthingsd.com/20120409/breaking-facebook-to-acquire-... Edit: Direct Source: http://newsroom.fb.com/Announcements/Facebook-to-Acquire-Ins... The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this…

Quite a jump from the $500 million valuation they were shooting for last week[1]. [1] http://techcrunch.com/2012/03/08/no-filter-required-instagra...

It's because they doubled their revenue since last week.

Oh, that's right. Revenue doesn't matter. "This time, it's different!"

Re: Facebook acquires Instagram

#348

Post by corin_ » Tue, Apr 10, 2012, 5:33 AM UTC

kposehn wrote: post #190

tptacek wrote: post #139

Earlier quoted context omitted.

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…

> 1st & Goal doesn't matter unless you actually score Well put.

But after the first quarter would you rather be the team winning 2-0 thanks to a safety, or the team who have dominated the game and somehow are yet to get any points on the board?

I'm not saying Apple have only scored the safety, or that Google have dominated, just that we're no-where near the end of the game and given Google's game plan is a long one we can't say that it's worse, not right now - we can only predict that we think it is.

Re: Facebook acquires Instagram

#349

Post by sendos » Tue, Apr 10, 2012, 5:35 AM UTC

homosaur wrote: post #86

inmygarage wrote: post #62

This is very reminiscent of Google/YouTube circa 2006. When Google bought YT it was a small team of people and a pretty nascent product that people really loved, and the usage numbers were out of control. They left the product mostly untouched and let it grow on its own. Though there was major criticism at the time, it is one of the best tech acquisitions of the past decade.

YouTube is a content paradise though. There's tons of value there and you can sell ads against it or even charge for premium services. Where's the money in Instagram? The content is practically worthless and their only real value is in their userbase. Even though I use the Instagram client, most of the time I see photos, they come through Twitter. So that also reinforces for me that any value is in the users and not…

> I'm more convinced that we're in a 2nd bubble now more than ever.

I agree. So far I've mostly dismissed talk of "the next bubble", but this pretty much solidifies it.

Of course no one knows when the bubble will burst, so I guess investors are making as much money as they can before it inevitably does burst. It's a classic case of the "greater fool theory" http://en.wikipedia.org/wiki/Greater_fool_theory

Re: Facebook acquires Instagram

#350

Post by avree » Tue, Apr 10, 2012, 5:43 AM UTC

marcamillion wrote: post #128

Some quick back-of-the-envelope math for how much the co-founders walked away with. Assuming the first round of $500K was @ $2.5M valuation, giving those investors 20%. So the founders are left with 80%. Further assume the 2nd round of $7M @ $20M valuation, giving those investors 35%. So the founders are left with 45%. Further assume the 3rd round of $40M @ $500M valuation, giving those investors 8%. So the founders…

According to VentureBeat, the CEO made off with $400M. http://venturebeat.com/2012/04/09/instagram-ceo-just-made-40...