Now, Facebook is paying a cool billion dollars for the two-year-old app-based photo service, Instagram. Instagram has just 13 employees, 30 million users and no revenues. Facebook's Mark Zuckerberg decided the social media giant absolutely had to have the startup, and took a year's worth of cash flow and offered it up, about twice Instagram's recently closed Series B venture round valuing the company at $500 million.
Though there was no indication of other bidders, however, everyone seems convinced that a Google or an Apple was lurking out there ready to make its own pre-emptive bid. In the developing suspense about the Instagram/Facebook deal, Zuckerberg didn't have a choice- He had to strike. A somewhat eat or be eaten scenario. The sheer uncertainty of the social media landscape can't tolerate hesitation, prompt action demanded.
In California, venture capitalists, investment bankers and analysts can't praise the deal highly enough, of course, everyone would eventually profit from the resultant euphoria). Zuckerberg showed brilliance, they said, by recognizing Instagram's potential and making the bid, despite the fact that this will further complicate Facebook's enormous and much-hyped IPO in a month or so.
While, so many still holds on tenaciously to the fact that Zuckerberg is mere buying a peace of shit. Whichever way, time is bound to tell. Like the American buying Alaska from Russia and once a big for nothing ice sheet, happened to big a big gold mine several years later. And, even playing a geographical edge that ultimately denied Russia, a foothold in the Western hemisphere.
The reality however, is that the deal has been made, what it turns out to be, is another story for another day.
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