

Instagram is not worth $1 billion to Facebook - IceCreamYou
http://www.isaacsukin.com/news/2012/04/14/instagram-not-worth-1-billion-facebook

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michaelperalta
Something that you're forgetting to consider in your analysis is that while
Instagram is a mobile first company right now, there is demand and a place for
them to have a stronger web presence. There have been other media outlets to
speculate on this topic but obviously before the acquisition they did not have
the resources to dedicate time to a better web experience. Now that they will
be given significantly more resources they will now be able to deliver such an
experience. As you've noted web advertising is far more effective of a method
and therefore will be an area for revenue generation. Instagram would also
have the possibility of creating a platform for people to sell their photos or
have them made into art like other companies do right now. Things like
promoted pictures could be implemented much more easily to work with brands.
In the same way that Facebook generates a primary amount of its revenue while
leaving mobile untouched for the time being I believe the same can be done for
Instagram. Mobile is the bread and butter for Instagram and still will be as
it continues forward but a web based experience can greatly help the company
both grow its user base and grow revenue.

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IceCreamYou
Basically what you're saying is that Instagram actually does have the
potential to make $1B. Care to ballpark some numbers as to what income your
suggested methods of monetization would actually have to produce to make
Instagram be actually worth $1B?

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paulhauggis
Something is only worth what someone is willing to pay.

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slantyyz
Exactly. Beyond everyone's need to rationalize _why_ Facebook paid that much
for Instagram, it's clear that Instagram _is_ worth $1B to Facebook, because
that's what they paid.

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IceCreamYou
The relevant question is not "what is Instagram worth" but rather "what should
it be worth." That is, we already know that Facebook values Instagram at $1B;
the question is whether that valuation makes sense.

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slantyyz
But "what should it be worth" can be debated until you're blue in the face and
still have no real outcome. What Facebook paid is a fact, not speculation.

For all you know, Google is kicking itself for not making a $2B offer to them,
because Google Plus could use all the help it can get.

