Big news of the weekend was Facebook’s $1bn acquisition of the mobile Photo App Instagram. Now Facebook has deep pockets, having itself been valued at $100bn, but a lot of commentators have been asking why pay so much for what is essentially a little app which adds filters to your photos and then lets you share them?
Well for starters, Mark Zuckerberg has pledged to keep Instagram running in the same way that it currently does (you won’t be forced to post in Facebook and you will still be able to maintain separate Facebook and Instagram networks,) which now makes Facebook an umbrella company for the first time, since previous purchases have been absorbed into the company without external trace. Secondly and more importantly, Instagram comes with a client base of 30 million+ users, mostly from the younger sectors which contrasts the ageing average user of Facebook (since, like, EVERYONE joined.)
Yes, 1bn is a large sum of money, but this is not like the days of the previous DotCom bubble – this time huge prices are being paid for companies which actually have large existing consumer bases instead of just potential audiences.
Zuckerberg needs to be careful though, all of this comes straight after Apple fanboys got their collective pants in a bunch about the rollout of <whisper>Instagram for Android</whisper>, just check out here, and while they will get over it, it would be wise for Facebook to let this whole thing die down for a bit before they change a single character in Instagram’s source.


