Zuck effectively made the Instagram deal himself and made it 70% stock
0. phoneArena 18 Apr 2012, 15:25 posted on
The news that Instagram was bought out by Facebook wasn't really a shocking story, it was the price tag on the sale that had everyone confused. Now, we're getting more info on the way that deal came about and how the deal...
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1. downphoenix (Posts: 1988; Member since: 19 Jun 2010)
Probably one of the dumbest things Zuckerberg has ever done. Paying $1 billion for Instagram is like paying $200k on a Honda Civic.
4. Non_Sequitur (Posts: 1111; Member since: 16 Mar 2012)
Instagram for Android hit 1 million downloads under 24 hours after launch, and totaled more than five million downloads in six days. I see all my friends constantly using Instagram.
In hindsight, it may not have been a GREAT move, but it was a good one at least.
5. downphoenix (Posts: 1988; Member since: 19 Jun 2010)
1) How is it even profitable for Facebook to purchase Instagram? It would take a very, very long time for them to make enough off of it in advertising revenue to be worthwhile. We're talking YEARS.
2) Its pointless. Instagram already posts to Facebook as it is.
3) There are viable alternatives that would have costed a fraction of what this purchase entailed.
13. MobileCaseReview (Posts: 239; Member since: 10 Feb 2012)
The funny thing about social networking and business, the idea of having ROI's take time is a thing of the past. Zuck has eyeballs drawn to FB already. The next thing he wanted was data (pictures). For example, if "Tom" from myspace waited 6 more months for the sale to Rupert Murdock, the sale of about $566 million to a cool possible $1.2 billion. So in hind sight, he was getting in before the "economic s curve/bell curve" started shooting up for Instagrams value. Instagram is going to continue to keep growing and I expect it to hit more OS's out side of Android and iOS. Then again, I'm not an economist or a person who specializes in business acquisition. Would love to hear Bill Gates and Warren Buffets take on the matter.
20. sgtdisturbed47 (Posts: 94; Member since: 02 Feb 2012)
"We're talking YEARS."
When it comes to business, especially huge businesses, it's not uncommon for large investments to take some time to start paying off. Financial gain is paramount, but saturation and name recognition are also important in the long-run. Granted, FB is a household name now, but this may open them up to other opportunities.
6. MichaelHeller (Posts: 2573; Member since: 26 May 2011)
how can you put a price tag on love? Users LOVE Instagram. No one loves Facebook. So, Zuck is trying to buy it.
15. JeffdaBeat (unregistered)
In addition to that, I think the point is to get the company while it's still cheap. Folks scoffed at Facebook back in the day and look at it now.
2. OmarF82 (Posts: 17; Member since: 09 Jan 2012)
Say whaaaatttt what a dumb move by Mr. Zuckerberg. OMG.
3. jmoita2 (Posts: 929; Member since: 23 Dec 2011)
Let's hope he loses a ton of money,the little crook...
7. cripton805 (Posts: 746; Member since: 18 Mar 2012)
I call a good move... Why? Because Instagram was going to pose a threat to Facebook. Just like Facebook did away with MySpace. If MySpace would have bought Facebook, they might have lived a little longer.
9. iamcc (Posts: 1319; Member since: 07 Oct 2011)
In other words he's a successful businessman.
19. shandesilva (Posts: 73; Member since: 28 Mar 2012)
and he hunts animals for fun and to eat...savage!
hate this scumbag..wish fb would bankrupt and ppl would start using
10. good2great (Posts: 952; Member since: 22 Feb 2012)
This is business 101 to all the broke a$$ haters above...lol
Zuck knows what he is doing... trying to keep facebook alive.
instagram Devs are filthy stinky RICH$$$$$$ off of a basic sub par app... AMAZING!
12. Penny (Posts: 903; Member since: 04 Feb 2011)
$1 Billion in cash and stock, with a 30/70 split, means $300 million in cash and $700 million worth of stock in Facebook. According to the WSJ article that was sourced, Zuckerburg was trying to argue to Instagram's CEO that FB could one day be worth $200 Billion, so 1% stock might suffice to cover Instagram's asking price of $2 Billion.
When all is said and done, yes, Instagram may make out with a deal that values them a little above $1 Billion. But I don't see FB reaching that kind of valuation (Google status, btw), or even remaining at its current valuation for a sustained period of time. Either way, Instagram made out great considering they have no revenue.
14. taz89 (Posts: 1768; Member since: 03 May 2011)
Think you may have gotten this wrong Micheal... Instagram owners only get 1% STOCK of Facebook... So Instagram may or may not get more than 1billion....
16. Nithence (Posts: 4; Member since: 18 Apr 2012)
I think we can not judge if s.th that people has bought is reasonable or not. Some time it does not mean any thing to you but it means everything to other people as they need it to fill the missing piece that could help them to feel complete or gain a big fortune. My own example.. i need to run my own business and i put my business name as 010xpress... Then i contacted to local telco for this number 010 977 377 to use as customer hotline service. This number represents my company name. If you use feature phone to text my company name 010xpress you will see it as 010977377. You know what, telco already sold this number to anyone. So i have to contact to the owner to persuade him to sell it to me. Normally, with this kind of number, i should spend around 10$ or 20$ to get it. But with this circumstance, i ended up paying $500 to get it. I had no choice. So i had to get it..
17. kanagadeepan (Posts: 518; Member since: 24 Jan 2012)
When you are getting hell lot of money than you or your hard-work is worth, then you will never know its value...
18. BattleBrat (Posts: 853; Member since: 26 Oct 2011)
You and your friends make an app, next thing you know you sell it for 300Mil and Potentially 75 BILLION in stock, Screw the lottery I'M GONNA MAKE SOME APPS!
*Resumes reading iOS apps for dummies*