

How Twitter’s secret offer for Instagram made Facebook pay $1B - hornokplease
http://venturebeat.com/2012/04/26/facebook-paranoia/

======
justinph
John Dvorak is a commentator quoted in the story. Why do people continue to
take anything this guy says seriously? He's been wrong so many times about so
many things in the past.

~~~
seiji
A broken clock is still right twice a day.

The oddest secret of success is that you never feel successful. You feel
someone else is always _almost_ about to dethrone you. Imagine if you had
unlimited funds to defend your delusions.

~~~
officialchicken
>Imagine if you had unlimited funds to defend your delusions.

I'd hire the crack tech writing team of Devorak, Cringley, Arrington, and
Siegler to work full time on my never-to-be-published biography.

------
ams6110
_Zuckerberg, we’re told, lives in perpetual anxiety, preoccupied by the fear
of Facebook losing its place, terrified that youngsters will get their social
networking fix from other services. That fear served as the catalyst behind
his decision to buy Instagram and keep it out of the hands of a cross-town
competitor._

Paranoia is by definition irrational. I don't see this ending well.

~~~
spdy
This is a very good thing inside a company who can only grow through
innovation. Imagine Zuck starting to become laid back and happy about what he
has achieved. Facebook would be obsolet within 1-2 years. He has to be on the
lookout all the time to kill threats to his company whenever he can.

~~~
nostrademons
You can't innovate through fear - it kills creativity. When you're afraid, you
tend to get tunnel vision and can't see beyond the threats, and everything you
make becomes a derivative of them.

To the extent that Google manages to innovate (and we don't always - we've
caught a lot of flack for that lately), I suspect it's because of the layer of
middle-management whose only job is to stand between the paranoia of the
executives and the creativity of the engineers & PMs. Well-functioning teams
here always seem to have a strong leader that basically takes all the shit
from above and lets only the high-level direction from the executives reach
the engineers, filtering out all the fear and capricious whims.

------
guynamedloren
If anybody was still wondering, yes, Facebook's Instagram acquisition was
entirely defensive. That, more than anything, explains the $1BN price tag.

~~~
mkramlich
Yep. The most rational explanation for that valuation was that it was
irrational. I truly think that was the thought process, whether consciously or
subconscious. It sure as hell wasn't based on revenue.

------
joshu
Noshop is usually signed before a term sheet is agreed upon.

Little details being off like this always make me wonder a out the rest of the
details in articles.

~~~
alain94040
Not necessarily, I can issue a term sheet, show it to you, it includes a no-
shop clause, and you never sign the term sheet.

------
jasonwatkinspdx
Sadly this will be seen as a clever example to emulate, rather than the
critique it should be.

Do you want to play poker or build a better world?

------
cmbaus1
I speculated that this might be the case. <http://baus.net/instagram-is-
twitter-the-loser>

Strangely, Chris Sacca and Jack Dorsey were both investors in Instagram and
they still lost the deal. I suspect it just got to rich for them. I don't
think this bodes well for Twitter.

------
sparknlaunch12
Systrom took $1b instead of twitters lower offer?

There is talk that this purchase was strategic to prevent twitter or google
buying a photo platform.

Whatever happened this story is not black and white. This sort of money is
crazy.

------
RandallBrown
This makes more sense to me. At first I didn't get it because Facebook already
dominates mobile photos. I would guess Facebook's mobile apps do considerably
more photo sharing than Instagram did.

If you add a photo network on to twitter though, it becomes a lot more of a
facebook competitor and I can see people giving up on Facebook and moving
their main social networking to Twitter. I can see that being scary to
Facebook.

------
rollypolly

      Microsoft was the worst but not the first. Apple acts
      this way with Android, and Google has been paranoid for
      a few years.
    

Great quote. It makes me wonder if other companies secretly vied for Instagram
besides Twitter.

I'm sure Google and Microsoft would've been interested in them. Maybe
Facebook's seemingly outrageous offer was the only way to keep everyone at
bay.

~~~
ableal
I like the earlier bit of the quotation, more general and insightful:

 _“These huge West Coast companies, peopled mostly by kids who cannot believe
their good luck, commonly turn paranoid and think everyone is out to get
them,” veteran columnist and broadcaster John Dvorak told VentureBeat._

I'm also reminded of the old potato chip commercial where Jay Leno went "eat
all you want, we'll make more".

~~~
wmeredith
John Dvorak is a self-admitted professional troll. If he's being insightful,
it's on accident.

------
parasight
Is it that simple? Scare Marc and he throws money at you.

------
brianobush
would have been neat combination with twitter me thinks. I feel Instagram will
be sidelined in the future to focus on the FB quarterly earnings machine.

------
EREFUNDO
well played....well played....

