I write articles on topics which gives me butterflies in my stomach.Sorry ,After a long pause ..Here is the article again,but what made me write this is the below famous line:
Facebook acquired just a 551 day old ,13 employee company Instagram for just 1 Billion Dollars ...
Holy sh***
March 2010: Stanford University grad Kevin Systrom closes a $500,000 seed round from Baseline Ventures and Andreessen Horowitz while working on a location-based app called Burbn.
July 2010: Systrom and Mike Krieger, who also studied at Stanford, begin designing an app for sharing photos.
October 2010: Systrom and Krieger launch the Instagram photo-sharing iPhone app with 80 initial users.
Systrom uploads the first picture to Instagram.
December 2010: Instagram announces full photo support and sharing on Foursquare.
The app reaches 1 million registered users.
February 2011: Users grow to 1.75 million, sharing more than 290,000 photos daily.
The company raises a $7 million financing round led by Benchmark Capital and a group of angel investors including Twitter 's Jack Dorsey.
Instagram releases a real-time API that allows universal sharing on any service.
July 2011: Instagram's registered users top 6 million. More than 100 million photos have been shared.
August 2011: Facebook says it's getting ready to unveil a series of its own photo filters, reportedly after a failed attempt to purchase Instagram.
October 2011: One year after launch, Instagram's number of users continues to explode, with nearly 50,000 people signing up for the service each day, Systrom says.
November 2011: News reports hint that the company is seeking a $20 million valuation as it puts together another round of funding.
At TechCrunch Disrupt in Beijing, Systrom says the startup's most difficult day was its first, when the site crashed multiple times. "But it turns out people are very forgiving for something they love a lot," he says.
January 2012: From 1 million registered users at the beginning of 2011, Instagram grows to more than 15 million users. On average, 60 photos are uploaded every second, the company says.
April 2012: Sequoia Capital is said to be leading a $50 million funding round for the company, valuing Instagram at $500 million.
The company unveils its Instagram for Android app and says it now has more than 30 million users.
Facebook announces that it has
agreed to purchase Instagram
for $1 billion in cash and stock.
Instagram's Buyout: How Does It Measure Up?
Andy Baio in his blog,crunched the numbers, pulling together data from a selection of 30 notable internet acquisitions over the last ten years, from Broadcast.com to OMGPop, to see if the Facebook/Instagram acquisition was as crazy as everyone thinks.
Cost Per User
When a startup's acquired, they're purchased for any combination of the technology, talent, or the user base.
If we look strictly at the acquisition cost per user, Facebook got a relative deal with the Instagram purchase, paying roughly $37 for each of Instagram's 27 million users. (The median cost across all the acquisitions is about $92 per user.)
Compare that to acquisitions like Aardvark ($555/user) or Jaiku ($240/user), and you can systematically see which were likely technology or talent hires. The glaring exception is Yahoo's famous purchase of Mark Cuban's Broadcast.com in 1999, which paid nearly $10,000 for each of their 520,000 monthly active users, ten times any other startup. (Broadcast.com skewed the chart so much, I had to leave it off.)
Cost Per Employee
But if you look at the payout per employee, Instagram is completely off the charts. If split equally, each of Instagram's 13 employees would make nearly $77 million. The nearest runner-up is YouTube, with a paltry $24M for its 2006-era staff of 67. Skype, Broadcast.com, and Myspace all top the charts. The median? About $3 million.
Some would point to this as a sign of a bubble, but I think it's more likely it just reflects the incredible scalability of modern app architectures. Using cloud services, failover, and solid monitoring, Instagram can quickly scale up to support a
million new users overnight with very little additional engineering effort.
Extract Below is Mark's post in facebook:
"I'm excited to share the news that we've agreed to acquire Instagram and that their talented team will be joining Facebook.
For years, we've focused on building the best experience for sharing photos with your friends and family. Now, we'll be able 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.
We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook.
That's why we're committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.
We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.
These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram's experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook's strong engineering team and infrastructure.
This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.
We're looking forward to working with the Instagram team and to all of the great new experiences we're going to be able to build together"
Whatever you think of the price given the fact that Instagram had no revenues, the reality is it was going to be worth whatever Mark Zuckerberg felt like paying for it. Both Google and Facebook had approached Instagram several times over the past 18 months, but the talks clearly didn’t result in a deal. So Facebook was going to have to offer a huge premium over the last valuation for Systrom and the board to take any deal seriously.
So when Mark Zuckerberg posts a statement like this: “This is the first time Facebook has acquired a company or product with so many users. “We don’t plan on doing many more of these, if any at all.” Zuckerberg said. “But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.” You can’t help but wonder what these two companies will be doing together. Here’s the translation of that quote in math, according to Don Dodge, Facebook acquired Instagram for about $30 per user. In simple math, $30/user X 33M users = $1B.
So it occurred to me that its users made Instagram what it is today. Facebook didn’t buy the company, it bought the service. And when you purchase the service, you acquire the users. Well played, Facebook, well played.
Google, it’s time to buy Pinterest.
To pen down:"Facebook buys Instagram for $1 billion. Idiots, they could have downloaded it for free" Just Kidding.
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-Prakhyath Rai N
Blog Admin