In what is certainly a controversial move, Facebook has decided to use some of its stacks of cash to purchase Instagram, the adorable and darling runaway mobile photo-sharing app success story. Certainly a steal for Facebook, who is looking to be a one-stop photo depository.
While Instagram is without a doubt the most successful photo app (aside from Apple’s own Camera which comes pre-installed on all of its mobile devices). However, like most apps, they have failed to really monetize it despite extraordinary growth over the last 18 months. Will Facebook’s clout and soon-approaching IPO help drive Instagram into a major success story? Probably.
However, it is our firm belief that Instagram is actually worth a bucket-load more than $1billion. In fact, we almost had another “history repeats itself moment,” when in 2006, Yahoo wanted to buy Facebook for $1 billion, but was wisely rejected by Facebook.
Instagram, unlike Facebook, clearly did not believe in itself as much, and accepted the $1 billion offer. Wise strategy? Only time will tell. Perhaps Groupon’s failure to accept Google’s multi-billion dollar offer a few years back was a compelling enough story for Instagram to cave to Facebook.