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(CBS News)   Facebook pays $1 billion for a company that produces a free app that can make pictures from your $500 phone look like they were taken with a $10 camera   (cbsnews.com) divider line 56
    More: Obvious, Facebook, photo sharing, Shroud of Turin, software  
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1899 clicks; posted to Business » on 10 Apr 2012 at 8:25 AM (2 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2012-04-10 05:35:28 AM
*blink* *blink* oh he means the instant camera filters...

Weren't those like expensive back in the day?

/hipster out
 
2012-04-10 08:10:41 AM
$500 phone? who pays $500 for an iPhone?
 
2012-04-10 08:13:02 AM
Well, uh, a 500 dollar phone probably has a 5 dollar camera in it.

FlashHarry: $500 phone? who pays $500 for an iPhone?


anyone with a multi-year contract.
 
2012-04-10 08:19:24 AM
And it doesn't have ads.
 
2012-04-10 08:30:59 AM
I'm waiting to feast on delicious hipster tears.
 
2012-04-10 08:32:21 AM
The app lets users upload or take photos and apply filters to get a similar look and feel of lo-fi photography.

Huh. I assumed that since my phone's camera already has a crapton of effect filters, they all did.
 
2012-04-10 08:33:43 AM

Girion47: I'm waiting to feast on delicious hipster tears.


Regular tears aren't fair trade enough for you?
 
2012-04-10 08:42:43 AM
Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.
 
2012-04-10 08:47:11 AM

MattStafford: Basically, they are paying for 30 million extremely fickle users.


Most of whom, I'd assume the vast majority, already have Facebook accounts.
 
kab
2012-04-10 08:55:24 AM

apoptotic: The app lets users upload or take photos and apply filters to get a similar look and feel of lo-fi photography.

Huh. I assumed that since my phone's camera already has a crapton of effect filters, they all did.


Or that this hasn't been available for goddamn decades with photo apps.

I guess anything can be repackaged as new / interesting to Facebook types.
 
2012-04-10 08:56:09 AM

FlashHarry: $500 phone? who pays $500 for an iPhone?


who says it was an iPhone?
 
2012-04-10 08:59:42 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


You'd think people would remember 12 years ago. Oh well somebody'll make a killing I guess
 
2012-04-10 09:00:28 AM
Was this real money or Facebook "stock"?

Oh, internet bubble 2.0 is coming soon.
 
2012-04-10 09:01:26 AM

WhyteRaven74: MattStafford: Basically, they are paying for 30 million extremely fickle users.

Most of whom, I'd assume the vast majority, already have Facebook accounts.


I was reading about this yesterday and it seems the real reason for the purchase is that Instagram offers a shortcut to better mobile integration. While Facebook mobile is heavily used, it also sucks.
 
2012-04-10 09:02:10 AM

stuhayes2010: Was this real money or Facebook "stock"?

Oh, internet bubble 2.0 is coming soon.


Some of both, but the value of Facebook stock is fairly well established at this point.
 
2012-04-10 09:07:46 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.


Because Instragram has been eating facebooks lunch on the photo side of things. Revenue stream or not. To avoid becoming the next myspace - facebook needs to quickly adapt to the market. Facebook has been stumbling in the mobility market. Instragram helps in this space with new talent, a new advertising avenue and a way to get even more users to facebook. This is a smart move.

/this is hardly a large deal - during the dot.com area - $1 billion was pocket change
 
2012-04-10 09:10:15 AM

stuhayes2010: Was this real money or Facebook "stock"?

Oh, internet bubble 2.0 is coming soon.


Cash and stock. And living and working through Internet Bubble .5 and Internet Bubble 1.0 - I'm not seeing the same insanity in the market. During the last bubble - Instagram would of been bought up during the beta cycle of their first app for $10 billion in stock.
 
2012-04-10 09:13:08 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


Why would one of the largest photo hosting services in the world want to purchase one of the most popular photo sharing apps that allows users to add fun little effects their photos...?

Yeah....... that is a tough one.....hmmmmmm.
 
2012-04-10 09:13:38 AM

bikerbob59: FlashHarry: $500 phone? who pays $500 for an iPhone?

who says it was an iPhone?


so android phones cost $500? i thought the knock on apple was that it's expensive. weird.
 
2012-04-10 09:23:28 AM

stuhayes2010: Was this real money or Facebook "stock"?

Oh, internet bubble 2.0 is coming soon.


Beat me to it.
 
2012-04-10 09:23:57 AM
I just started to use instagram. its ok I guess but I don't see how its worth a billion. I didn't even know there was a website.
 
2012-04-10 09:46:46 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


Pretty much sums up my thoughts. I'm wondering if the money in investors' pockets is simply burning a hole. I just can't think of how $1 BN for 30 million users, 11 staff, and no hint of a revenue stream is good value for money.

/Google is probably trying to ring up FB to congratulate them, but can't get off the floor bc they're laughing so hard.
 
2012-04-10 09:49:16 AM
Cash out your internet stocks soon, because another Obama-cession is coming soon
 
2012-04-10 09:49:29 AM

FlashHarry: bikerbob59: FlashHarry: $500 phone? who pays $500 for an iPhone?

who says it was an iPhone?

so android phones cost $500? i thought the knock on apple was that it's expensive. weird.


The new generation of Samsung Galaxy phones are in the 600+ range if you buy them without a contract discount.
 
2012-04-10 09:50:52 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream.


It was a good buy for Facebook. After all, Findwebsitesworth valued it at a Trillion Dollar$.
 
2012-04-10 09:51:15 AM

FlashHarry: bikerbob59: FlashHarry: $500 phone? who pays $500 for an iPhone?

who says it was an iPhone?

so android phones cost $500? i thought the knock on apple was that it's expensive. weird.


Expensive? You were able to pick up a 3GS for free for a while there. I think now they charge a buck for the 3GS, and $99 for the 4. The 4s is $250. If you buy them through your phone carrier.
 
2012-04-10 09:55:18 AM

SharkTrager: I was reading about this yesterday and it seems the real reason for the purchase is that Instagram offers a shortcut to better mobile integration. While Facebook mobile is heavily used, it also sucks.


THIS. And instagram is a brand. A very well known brand.

I think it's a smart move - an expensive move, maybe a bit over valued but it's 1B in cash and stock, not all cash IIRC.
 
2012-04-10 09:56:06 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


Think about it like this and it'll make more sense:

1. Instagram has 50 million users. That's just $20 per user. Or cheaper than a big budget ad campaign.

2. Instagram provides instant location data for advertising.

3. Photo analysis software is getting good enough that access to all these photos provides mountains of data.

4. In a year or two, Instagram would have ben a legitimate competitor to FB in the social network space.

5. Facebook mobile is ass. They needed a lightweight alternative.

6. FB ipo is coming. If Such hadn't done this now, he would have had to answer to share holders.
 
2012-04-10 10:00:23 AM

Lost Thought 00: Cash out your internet stocks soon, because another Obama-cession is coming soon


0/10
 
2012-04-10 10:01:45 AM

VivianVivisect: *blink* *blink* oh he means the instant camera filters...

Weren't those like expensive back in the day?

/hipster out


I'm just wondering if you have to use a Kinect or Wii remote or something similar to simulate flapping the picture before you can send it.
 
2012-04-10 10:06:51 AM

Evil Twin Skippy: Expensive? You were able to pick up a 3GS for free for a while there. I think now they charge a buck for the 3GS, and $99 for the 4. The 4s is $250. If you buy them through your phone carrier.


Really? Free? Or do you mean Free*?
 
2012-04-10 10:11:20 AM

Lost Thought 00: Cash out your internet stocks soon, because another Obama-cession is coming soon


The politics tab is ---> that way
 
2012-04-10 10:55:41 AM

Lusiphur: MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.

Think about it like this and it'll make more sense:

1. Instagram has 50 million users. That's just $20 per user. Or cheaper than a big budget ad campaign.

2. Instagram provides instant location data for advertising.

3. Photo analysis software is getting good enough that access to all these photos provides mountains of data.

4. In a year or two, Instagram would have ben a legitimate competitor to FB in the social network space.

5. Facebook mobile is ass. They needed a lightweight alternative.

6. FB ipo is coming. If Such hadn't done this now, he would have had to answer to share holders.


That's some Time Warner thinking there.
 
2012-04-10 10:56:57 AM

Starfly: SharkTrager: I was reading about this yesterday and it seems the real reason for the purchase is that Instagram offers a shortcut to better mobile integration. While Facebook mobile is heavily used, it also sucks.

THIS. And instagram is a brand. A very well known brand.

I think it's a smart move - an expensive move, maybe a bit over valued but it's 1B in cash and stock, not all cash IIRC.


DOUBLE THIS

I read some proportionally ridiculous amount of every photo taken in the history of mankind is on facebook. They're looking for a way to make the mobile photo experience better (for them). Since iOS went with twitter over facebook, this is their chance to rise above? Aren't they on-again, off-again with the idea of a facebook branded phone?
 
2012-04-10 11:01:40 AM
Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.

If it retails for $500, it is correct to say "$500 iphone" because its value is $500.

five hundred dollars.
 
2012-04-10 11:14:29 AM

MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


Welcome to tech bubble 2.0.
 
2012-04-10 11:50:01 AM
popular photo-sharing software company Instagram?

The endgame is obvious: Facebook wants to own the licensing rights for every photo on the internet
 
2012-04-10 12:45:44 PM

bangmaid: Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.


your statement is completely wrong. whatever people are paying is, by definition, what it is worth.
 
2012-04-10 12:52:22 PM
You'd think that for $900M they'd be able to put together a mobile app and photo app that didn't suck. Hell Halo 3 only cost $55M to make.
 
2012-04-10 12:52:31 PM

proteus_b: bangmaid: Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.

your statement is completely wrong. whatever people are paying is, by definition, what it is worth.


Just like all those houses were worth millions.
 
2012-04-10 01:18:38 PM

bangmaid: Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.

If it retails for $500, it is correct to say "$500 iphone" because its value is $500.

five hundred dollars.


Value is not the same as price.
 
2012-04-10 01:30:02 PM
MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.


My guess is they hold patents that will be of use to facebook, both in revenues from using other violating them, and in facebooks planed expansion into the mobile world.

Like Motorola, and now even AOL, conglomerates are finding it prudent to outright buy patents through corp takeover because of the fraked up state of IP and patent law in this country.
 
2012-04-10 03:23:36 PM

digistil: MattStafford: Correct me if I'm wrong, but Instragram has no real revenue stream. In addition, the users provide relatively little personal information (and presumably would be unlikely to start providing information, particularly towards facebook). So the whole selling consumer information to outside parties thing wouldn't provide a ton of revenue, and putting up small ads isn't going to do it either. How the hell does facebook think it is worth one billion dollars? Am I missing something? Basically, they are paying for 30 million extremely fickle users.

I guess it goes back to all of these mobile companies being worth boatloads. Zynga? OMGPop? Now Instagram? Are people for real about these valuations? It is mind boggling.

Pretty much sums up my thoughts. I'm wondering if the money in investors' pockets is simply burning a hole. I just can't think of how $1 BN for 30 million users, 11 staff, and no hint of a revenue stream is good value for money.

/Google is probably trying to ring up FB to congratulate them, but can't get off the floor bc they're laughing so hard.


After recall of a google algorithm, I think I do know how FB is actually gonna turn a profit from Instagram. Long story short, Google scans pics taken with Android (as well as its iOS app) to help determine the demographic of the user to deliver more targeted ads. I'm guessing FB is going to use Instagram to do the same thing.
 
2012-04-10 03:28:09 PM

SharkTrager: bangmaid: Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.

If it retails for $500, it is correct to say "$500 iphone" because its value is $500.

five hundred dollars.

Value is not the same as price.


I think you're the only one here that needs to actually be reminded of this.
 
2012-04-10 03:35:04 PM
Facebook and Twitter are different animals. Instagram is the closest thing to it right now, and as such, Instagram could conceivably become Twitter's largest competitor in the near future.
 
2012-04-10 04:42:03 PM
$1,000,000,000 for a simple photo sharing tool that does nothing more than apply a preset filter to everything?

Really?

REALLY????//?/?
 
2012-04-10 05:09:18 PM
As others have said, it's probably less about the direct revenue stream and more about technologies/patents/etc that instagram has.
 
2012-04-10 05:35:05 PM
Hey, how's all that IPO money treating you, Zuck? Is it getting to your head yet?
 
2012-04-10 05:48:44 PM

bangmaid: Just becuase nobody pays $500 for an iphone, that doesnt mean its not worth $500.

If it retails for $500, it is correct to say "$500 iphone" because its value is $500.

five hundred dollars.


So if I list my house for $2 million dollars, it will then be worth $2 million dollars, even if I bought it for $300,000 6 months ago? Nope, your logic is shiat.
 
2012-04-10 07:53:19 PM

D135: popular photo-sharing software company Instagram?

The endgame is obvious: Facebook wants to own the licensing rights for every photo on the internet


That's sort of what I was thinking. Once you take a pic with this app, FB will own it and store it forever.
 
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