It’s not about the $1 Billion

$1 Billion. It all came as a bit of a shock, out of left field. Everyone shouted and screamed, concerned that Instagram would be folded under and into facebook. Rightfully so if you’re sitting on the fence about facebook acquisition strategy never mind a fan of Instagram itself which many people are. It is argued that Instagram isn’t worth $1 Billion, a company with no  revenue. What has come out since the announcement regarding the quick fire negotiating between twitter / Instagram and facebook / Instagram.

Putting that aside for the moment, let me suggest that Mark Zuckerberg might have paid $2 Billion for Instagram and still not folded it directly in to facebook. Let me further suggest that now the $1 Billion purchase has happened he won’t for the foreseeable future folding it into facebook.

Looking at a small amount of facts;

  • Instagram is a very strong team, they scaled Instagram to an incredible user base with an incredibly small team.
  • Instagram now have an incredibly strong design team.
  • The majority of the Gowalla team was merged in to Facebook, they were also a very strong mobile team with great talent. (Gowalla was an incredibly good product in the early days – my opinion)
  • Facebook timeline apps are becoming more and more popular.

The Timeline

Predominantly, the timeline is made up of visible content from other sources. Video’s from youtube, music from Spotify, food photos from foodspotting and photos of anything from Instagram and these are just a few. If we look at textual posts, we can pretty much post to facebook from anywhere. ‘Our’ timeline is made up of content from auxiliary apps.

Zuckerberg also said his $1 Billion purchase was probably a one-off and wouldn’t become a habit. $1 Billion purchases might be one-off’s but I can see Facebook buying up experience apps to push to the timeline. It’s those auxiliary apps which make up the pieces of your life. And the more Facebook buys up, the more your life will be complete on the timeline. If all of the experience apps pushing to facebook just stopped for one day, how quiet would people’s timelines be?

NB: This post came from a conversation @alexhorre and I had.

Published by

Gavin

Lead Interaction Designer at DigitalDWP. Organiser of Industry, The Practical Web Conference..

3 thoughts on “It’s not about the $1 Billion”

  1. $1bn is a wonderful headline figure for sure but don’t forget, the majority of that is stock option based on Facebook’s potentially inflated IPO estimated value so while the deal is no doubt still massive, it’s all relative.

    As an Android user, I’ve only recently had access to Instagram and I must admit it’s an addictive app and I can see why it’s been snapped up but the big fear is that so many app developers/companies will see this non money making business model as an actual strategy.

    J.

    1. James, thanks for the comment. 🙂

      If Facebook IPO in the near future the stock option alone will be incredibly large. I personally like Instagram, and I further believe that there are many many apps with non money making business models out there as a strategy, look at any which grabbed attention at SXSW this year and you’re looking at a lot of me-too apps.

  2. Zuckerberg really did a wrong decision purchasing instagram and you are right that Instagram is not a 1Billion worth. Maybe, Zuckerberg doesn’t know how to spend his money anymore, that why..lol

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