Facebook buys Instagram for $1 billion

We don’t usually cover the latest social media happenings here at TR, but this latest development almost beggars belief. Yes, as Reuters reports, Facebook is buying photo filter and sharing service Instagram for $1 billion. One billion dollars.

Mark Zuckerberg broke the news on Facebook yesterday, saying he wants his company to “work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.” Zuckerberg adds that Instagram will continue to grow independently and will still let users post pictures to “other social networks,” as well.

According to Reuters, Instagram lacks “any significant revenue.” Its only strength may be its sizable following—30 million users—which will no doubt grow now that the service is available for Android. (Instagram spent most of its 18-month existence as an iOS exclusive.)

Now, I love photography and sharing photos. But really? Really? Instagram’s chief appeal seems to be ruining perfectly good digital photos by cropping them into a Polaroid aspect ratio, messing up the white balance, and adding a bit of vignetting. There’s a sharing component, too, but photo sharing has been done better by others—and Facebook has decent photo sharing functionality already built in. I wonder what it says about our society when something so pointless and frivolous amasses such value. And don’t get me started about those iPhone users voicing their anger over Instagram’s Android release.

Facebook’s takeover may not be as frivolous as the app itself, though, of course. Reuters says Instagram’s leadership “has mulled possible strategies to expand the service into a fully featured social network.” Perhaps Zuckerberg was eager to nip that in the bud and avoid having to face yet another competitor somewhere down the line. At least, I hope that was the reason.

Comments closed
    • cphite
    • 8 years ago

    The real point of this purchase is advertising.

    On the right side of the Facebook page there is a “Sponsored” section that is generally populated with advertisements which are in large part determined by your likes, your location, and other personal information. For some time now, Facebook has also been pushing friends postings in this section; so if one of your friends clicks like on something for example, you might see a “So-and-so likes Something” link in your Sponsored section. If you click on the “See all” link, you’ll see several of those.

    Instagram provides a platform for pushing photgraphs along with commentary. So, if one of your friends takes a picture of something and posts something positive about it, that becomes a potential advertisement. Not just a link and a logo, but a link and an actual unique photograph. The folks at Facebook have calculated that enough of the 30 million Instagram users will also be Facebook users, and will be providing this content, to be worth a billion dollars.

    They don’t care about the quality of the photos because the photos – the way they’re using them – will be shrunk down to itty-bitty thumbnails anyway. What matters to them is that the photo is being tied to someone on your list of friends, which makes it statisically more likely that you’ll click on the advertisement and get them revenue.

    Instagram is ideal because it already has a ton of users, and those users are pushing ridiculous numbers of pictures every day. And because it already standardizes the photos that it pushes in terms of size, resolution, and color.

    • derFunkenstein
    • 8 years ago

    To be fair, Instagram isn’t for ruining perfectly good photos. It’s for ruining photos that are taken with your cell phone. Which generally aren’t very good to start. Can’t ruin it if ti sucked to begin with, amirite? 😀

      • axeman
      • 8 years ago

      hey, I’ve seen a perfectly good cell phone photo! Sure, it was just the one, but they exist, honest!

    • ronch
    • 8 years ago

    Funny how these big companies throw around billions like it’s just a wet rag.

    • yogibbear
    • 8 years ago

    You know if I was a betting man… I would guess that Adobe might have a few patents that they could throw at facebook for a healthy cash in on this terrible transaction. 🙂

    • albundy
    • 8 years ago

    really? nobody here has been able to decrypt the hidden message staring them in their face?

    “According to Reuters, Instagram lacks “any significant revenue.” Its only strength may be its sizable following—30 million users”

    zuckerdork didnt buy instagram for the app. he bought the user base, because once all of them fall into his scheme of “social networking” aka ad revenue for a target audience, all their lives and pictures belong to facecr@p and the highest bidder to mine the hell out of it, cus we all know nobody puts personal info in facebook.

    • lycium
    • 8 years ago

    The only thing crazier than buying Instagram for a billion is the comments on this topic… just wow.

    • chµck
    • 8 years ago

    Instagram turns the ordinary teen into an artist! /s
    Seriously though, it really pisses me off seeing my fb news feed filled with shoddy filtered photos.

    • christopher3393
    • 8 years ago

    Thanks Cyril. Right on the mark.

    • Meadows
    • 8 years ago

    I have not heard of this “Instagram” until this news arrived.

      • Thatguy
      • 8 years ago

      I have heard of it very recently. I didn’t realize it was so popular that FB considered it a threat worth wiping out with a billion dollar payday.

    • squeeb
    • 8 years ago

    ugh

    • ludi
    • 8 years ago

    Mark Zuckerberg’s net worth this year (so far): $24 billion
    Facebook estimated market capitalization: $100 billion
    Facebook revenue for 2011: $3.71 billion (up $1.9 billion YoY)

    Amount spent on Instagram: pocket change

      • indeego
      • 8 years ago

      You call 1/3 of last year’s revenue pocket change?

      Today’s Facebook could be yesterday’s yahoo, myspace, or AOL. There is [b<]zero[/b<] guarantee that 100+ billion cap will hold. In short: It's a huge bet. Much more than Apple and Microsoft and Google, that have much more varied markets and diversification.

    • MadManOriginal
    • 8 years ago

    wtf @ the twitter posts from iOS users.

      • adisor19
      • 8 years ago

      Most Android phones that are sold have crap cameras so the resulting pictures look like a blurry mess when compared to what comes out of an iPhone. While most of their posts seem elitist and snobby, they are pretty much justified.

      Adi

        • adisor19
        • 8 years ago

        Truth hurts, eh ?

        Adi

          • lilbuddhaman
          • 8 years ago

          The only truth here is that you’re getting thumbs downed for making a by-the-book Apple fanboy post.

          • Meadows
          • 8 years ago

          Still talking to yourself?

        • yogibbear
        • 8 years ago

        Do you get kick-backs?

        Yogi

        • sweatshopking
        • 8 years ago

        the troll/fanboy is strong with this one.

    • Yeats
    • 8 years ago

    People need to stop “social networking” and start [i<]working[/i<].

      • Grigory
      • 8 years ago

      Thank you for speaking it out!

      • lycium
      • 8 years ago

      Wow, you had -5 downvotes, no wonder America’s economy sucks 😛

        • Yeats
        • 8 years ago

        Well, putting aside the “get rich quick” scheme that is the underpinnings of the American economy, I think the fact that I currently have *only* 4 downvotes for that statement is encouraging news for the economy! 🙂

      • lilbuddhaman
      • 8 years ago

      somewhat ironic you replied to this during what most people call “working hours”. (you still got a +1 despite that though)

        • yogibbear
        • 8 years ago

        Truth: This is a global website.

      • Bensam123
      • 8 years ago

      “Good workers should have their heads down at their desks working diligently at all hours during their shift.”

      The old blood will eventually die out.

    • bowman
    • 8 years ago

    I still have absolutely no fucking idea what the point of Instagram is besides, as you said, ruining photos.

    Why on EARTH is it popular? Can some of you people who use it explain the purpose of it? :/

      • ImSpartacus
      • 8 years ago

      Yeah, I feel like an old man that doesn’t get this new fangled technawlawgee.

      But seriously, what’s so special about Instagram?

      • liquidsquid
      • 8 years ago

      It was because it was an exclusive iPhone only app. Not anymore there goes the value.

      • End User
      • 8 years ago

      I see the appeal. Sometimes I like using DxO FilmPack to give my motorsport photos a 70’s look.

      • adisor19
      • 8 years ago

      It was because it was an iPhone exclusive so the pictures were always of decent quality. Once the Android app came out, it started going down. If you ask me, the instagram owners made a killing JUST before the bubble burst and all the iPhone users switched for an alternative without all the crappy quality Android phone pictures.

      Adi

        • yokem55
        • 8 years ago

        So did this app not work on the ipod touch or the ipad2 with their crappy cameras?

          • adisor19
          • 8 years ago

          The majority of pics came from iPhones.

          Adi

        • sweatshopking
        • 8 years ago

        Adi’s logic:” i want to take pictures and make them look old/stupid. i have an iphone. I dl instagram. mission accomplished! my pictures all look bad with stupid filters! oh wait, somebody ELSE’s phone’s camera isn’t as good!! UGH DISGUSTING PHOTOS. [i<] HIS [/i<] pictures are so ugly i can't stand it, now i'll type hate and spew moronic crap all over the internet, even though it doesn't affect the quality of my pictures in anyway. It does, however, affect my elitist, moronic feeling of belonging to a stupid gadget club." Yeah, that sounds about accurate for an apple user.

          • adisor19
          • 8 years ago

          I love myself.

          Adi

            • Yeats
            • 8 years ago

            Threadbare sheets, eh? Is there an App for that?

        • maxxcool
        • 8 years ago

        Hardly exclusive… every smartphone web,and,app,chrome,google,rim has photo filters. at least every phone i have owned has had such.

        • Washer
        • 8 years ago

        Solid troll much better than your normal standards.

          • adisor19
          • 8 years ago

          Thank you ! I always appreciate good feedback.

          Adi

            • sweatshopking
            • 8 years ago

            i fixed your -. i appreciate the competition.

    • vvas
    • 8 years ago

    [quote<]Now, I love photography and sharing photos. But really? [i<]Really[/i<]? Instagram's chief appeal seems to be ruining perfectly good digital photos by cropping them into a Polaroid aspect ratio, messing up the white balance, and adding a bit of vignetting.[/quote<] Amen, brother.

      • adisor19
      • 8 years ago

      OK i`ll say it: Instagram makes your pictures hip.

      Adi

        • Yeats
        • 8 years ago

        Instagram makes meh snaps mehier.

        • sweatshopking
        • 8 years ago

        you use it, don’t you adi.

        admit it. it’s not going to change your respect on this site. besides end user, most of us think you’re a crazy apple fanboy already.

          • adisor19
          • 8 years ago

          I have a Bold 9700. It doesn’t have apps.

          Adi

            • sweatshopking
            • 8 years ago

            you seriously going to say you DON’T have an iphone?

            • adisor19
            • 8 years ago

            Sold it not too long ago due to work using Lotus Notes *shivers* and only supporting BES.

            Slowly preparing migration to Exchange. Will get iPhone 5 when it will come out.

            Adi

        • Firestarter
        • 8 years ago

        Hip is the new mainstream. There, I said it!

    • jbraslins
    • 8 years ago

    Instagram rocks. I love it. But if they make it so you have to have FB account to use it, I’ll drop it in a heartbeat. Let’s pray they dont fuck it up.

    Glad to see Instagram folks having an epic payday.

      • ImSpartacus
      • 8 years ago

      You better start looking for alternatives.

    • indeego
    • 8 years ago

    I believe this says more about how little 1B is these days to companies rather than how largely valued they are.

    This reminds me of Yahoo’s broadcast.com debacle though. $5 billion, likely a penny never earned from it.

      • superjawes
      • 8 years ago

      Well how much is Facebook’s estimated value? Isn’t it in the hundreds of billions (IF they go public)?

      $1B is still a lot of money…it’s just a matter of the scale with the rest of the money pool. Compared to Apple, Microsoft, or Facebook, not so much. To your mom ‘n pop restauraunts, local chains, and even your major lotto winners, it’s still a huge number.

    • Bensam123
    • 8 years ago

    Unless there is some devious all encompassing scheme hiding under all of this, Mark you’re retarded. Go give your money to Notch.

    I guess this is better then Apple just sitting on top of their giant sum of money and counting their coins like Ebenezer though.

      • sweatshopking
      • 8 years ago

      wow. this almost seems trolly. NOT YOU TOO

      • nanoflower
      • 8 years ago

      I don’t understand the valuation but then I don’t use their product. According to what I heard the company had already been valued at a half a billion dollars last month before Facebook came into the picture so it was definitely well regarded by the financial analysts.

      Not a bad deal for a 12 person company. Yes, you heard right. A 10 person company has been sold for a billion dollars (Facebook stock and cash) which means it could be valued much higher if Facebook stock takes off when it finally goes public like I suspect it will.

        • Bensam123
        • 8 years ago

        Yeah, valuations are sometimes ridiculously stupid. This being one of those cases where someone (or some people) evaluating the company has no idea how it actually fits into the industry. ‘Someday when the moons align, this company will be a billion dollar asset’…

          • Washer
          • 8 years ago

          You know what’s ridiculous? Pretending like you don’t say the same things for start ups who do make it big. Facebook for one, YouTube another, Google at one point, on and on and on.

          Instagram has a huge active user base, a unfathomable amount of photos, and is just now arriving on Android. Guess what? You figure out a way to monetize that. That’s how Facebook is now able to give it a shot, that’s why no one questions Google buying YouTube these days.

          Nah, those idiot billionaires…

            • Bensam123
            • 8 years ago

            I don’t… those were services with an intent and purpose… They had a scope and goals. This is a photosharing service with a bit of social magic mixed in. As Cyril said, FB already has the only defining factor of their service already built in.

            I honestly never heard of Instagram, much like many people replying to this news snippet.

            • sweatshopking
            • 8 years ago

            then you’re living under a rock. it’s got 30 million users. you’ve likely heard of apple’s “ping” and it’s got 5 users. instagram has been big news for months.

            • indeego
            • 8 years ago

            30 million users is about what Skype had a year ago. Kinda impressive, but not even a percent of a percent of the whole Internet.

            • sweatshopking
            • 8 years ago

            sure, but you heard about skype a year ago.

            • lilbuddhaman
            • 8 years ago

            I heard about skype…almost a decade ago ?

            • sweatshopking
            • 8 years ago

            i did as well. skype now has 175 million, and is the largest chat client in the world. i just mean that 30 million is a large number.

            • Turd-Monkey
            • 8 years ago

            … and MS bought skype for 8.5 billion.

            • Bensam123
            • 8 years ago

            I’ve never heard of ping… There is no way to actually verify they have 30 million users either. The whole company just seems extremely bloated compared to what it actually is.

            • Washer
            • 8 years ago

            Intent and purpose? Scope and goals? You’re going to tell me a video sharing website/service with social networking has greater “intent” and “purpose” than a photo sharing website/service with social networking. You’re hilarious. YouTube at one point was in a very similar position, huge user base, massive chest of content but no good way to monetize it yet. They figured it out. That’s what you do with services that have 30 million users, about to add many millions more. You come up with a way to make it work. You stop pretending you have a crystal ball, realize that a loyal user base is sometimes more valuable than a obvious business model, and you take the risk.

            • Bensam123
            • 8 years ago

            When none exist and they’re pushing the whole industry forward, yes.

            If you want something that is hilarious, look at how you took the entire thing out of context. Different times for different ideas. Now it’s just one of many other websites just like it… FB does everything it does already and has more then their ‘claimed’ 30 million users.

            That in itself seems bogus. If 30 million people were using it then it would be all over social media sites and would’ve worked it’s way into the news too, it hasn’t. This whole thing smells. Photobucket, which has been around for years and is a well known and established name only has 23 million claimed on their website.

      • maxxcool
      • 8 years ago

      Um yeah, it’s called all you account data now belongs to mark. and your photos.

    • gbcrush
    • 8 years ago

    Just one more reason I wont be hopping on that train. Not that I wanted to swim in the pool and have my hair product put a bit of film (pun) in the water for the iPhone folks, but if I say “No” to something, I really like to feel good about it.

    So thanks, Zucks! 😀

    • yogibbear
    • 8 years ago

    $1 billion dollars seems excessive for what it is…

    I mean that is a lot of jets or steel or guns or nukes or land or whatever… but it’s just a very pointless app…. right. No wonder terrorists hate everyone.

      • kyboshed
      • 8 years ago

      $1Bn is cheap when you consider that it prevents Twitter or Google buying it from under them. Facebook have paid around $33/user although I’d imagine most users have Facebook accounts.

    • chuckula
    • 8 years ago

    one BILLION dollars! [/Dr. Evil]

      • superjawes
      • 8 years ago

      /raisepinky

      • rogthewookiee
      • 8 years ago

      the instant I saw this headline on the front page, I had my pinky at the ready!

    • Decelerate
    • 8 years ago

    Wow, App bubble much? Jealous? Yes I am 🙂

    Congrats to the members of Instagram for benefiting from a very much talked about app (I haven’t use it yet personally).

    As long as quality products get a spotlight, I don’t mind. Much. Much better than vapourware.

      • RickyTick
      • 8 years ago

      It was reported this morning that there are only about 12 people that work for Instagram. I don’t know how $1B will be split between them, but it looks like a lot of money for all.

        • nanoflower
        • 8 years ago

        One would hope so but it may turn out that the founders make out like bandits while grunts get little. It all depends on what the founders are like. Some want to see everyone share in the payday while others want every bit they can get even if they have lie, cheat and steal to get it.

          • lilbuddhaman
          • 8 years ago

          Screw Tina. Tina is a bitch of a receptionist anyways AND she wouldn’t put out. That holier than thou P**** of hers just cost her 100million bucks. Ask her again today and she’d eat the corn out your S***.

      • Firestarter
      • 8 years ago

      Quality product you say? I don’t see quality here, all I see is something that for some inexplicable reason got a huge mindshare. I mean, there much be some kind of magic to it to get half my friends posting even more inane pictures of cats, dogs and fast-food on Facebook, but as far as I can tell it has absolutely nothing to do with quality.

        • Decelerate
        • 8 years ago

        As Youtube has demonstrated, there was a HUGE untapped and hidden market for LOLCats.

        The product itself is of quality; answering the needs of its consummers. What people do with it is a whole other matter.

        A bit like the Kinect, who’s quality surpasses the console it was made for.

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