In the the acquisitions universe even 100 billion dollar companies aren't immune from panic buying of assets, especially in the capricious world of social networking.
Facebook's $1 billion purchase of a start-up with 13 employees, no revenue, and a 2011 valuation of $100 million seems punchy even by Silicon Valley standards. Yet, when the current go-to metric for valuations of start-ups unencumbered by revenue is people, you can see why Zuck panicked and paid a ludicrous price for Instagram. The company has over 50 million users in just under two years.
Facebook takes photo-sharing seriously, and this acquisition should leave you in no doubt that it wants to exclusively own that space. Furthermore, as GigaOm pointed out, Instagram has "cracked the code where Facebook itself has failed: viral growth via mobile".
Cue the arguments about the tech bubble 2.0 (social networking edition)...
Facebook's $1 billion purchase of a start-up with 13 employees, no revenue, and a 2011 valuation of $100 million seems punchy even by Silicon Valley standards. Yet, when the current go-to metric for valuations of start-ups unencumbered by revenue is people, you can see why Zuck panicked and paid a ludicrous price for Instagram. The company has over 50 million users in just under two years.
Facebook takes photo-sharing seriously, and this acquisition should leave you in no doubt that it wants to exclusively own that space. Furthermore, as GigaOm pointed out, Instagram has "cracked the code where Facebook itself has failed: viral growth via mobile".
Cue the arguments about the tech bubble 2.0 (social networking edition)...
1 comment:
Well said AR-I. This tech bubble is going to be magnificent. I reckon it will take 3 years + to mature to bursting point, maybe 5.
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