Facebook buys Instagram for $1B

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Best use that valuation to the best of your advantage while its there. Party like its 1999?

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If I was Zuckerberg, I would be trying to pay everything with stock at that valuation.

I just went on like a 15 minute rant in the bullpen about how we need all stop studying for the CFA and just spend 2 hours a night brainstorming on the simplest/stupidest app concept. The only requirement is to somehow tie it to facebook. Obviously we all know making money is irrelevant, instagram just leveled up again though as they fully admit they aren't even trying to in the first place. FMLApp. Every time this happens I think "well at some point people have got to stop massively overpaying for shite." And then it happens again, and it looks even more ridiculous than the last one.

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how we need all stop studying for the CFA

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Oh, and sorry for the derail, but I'm about to fail L3 like no one has failed a CFA before.

I'm debating on whether or not to even show up to the test.

I think we are going to see some Impairment of Goodwill from this acquisition... Have fun with all that CFA stuff, I have a few friends doing it and it appears step 3 is anything but a walk in the park

Definitely agree on pinterest (not the rest as much). Demographic and idea are $$$$$$$$$$$$$$.

People are pissed about it?

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Not everyone is happy about Facebook’s acquisition of Instagram this morning, it seems. In an apparent insta-backlash, a bunch of folks are tweeting about their intentions to delete their Instagram accounts now that Facebook has tainted their trendy social network with its massive data-grabbing paws.

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Users say delete accounts

Some of you folks don't realize which way the prevaling winds amongst these big tech companies are blowing.

It's all about advertising dollars on the net. Who can provide the best bang for the buck?

Google created Google+ to combat the fact that everyone was sharing everything they wanted for this advertising purpose on FB. FB won't allow them to utilize their information and as such, there's a huge chunk of the internet they can't troll for the kinds of information necessary to really & truly provide personalized search results-and with it, advertising.

FB's 1st shot across the bow in this department was when they told you they'd stop e-mailing you everytime someone put something on your page, and then gave you an opportunity to have an @facebook.com e-mail address.

This takes away Google's ability to serve you ads through G-Mail. Why would many more simplistic/younger/non "power" users of the internet go to their GMail account when they could do it all on FB, which is where most of them spend a majority of their time anyway?

So Google loses FB info & then starts to see GMail threatened.

On top of that, its tougher for them to troll Twitter, which is honeslty a GOLDMINE of potential to serve timely, realvant ad information to users. For awhile they could, but now they can't.

Google is also contemporaneously battling Apple. Apple is p!ssed at Google for getting into the mobile OS, phone & tablet systems. So Apple quietly bought Siri out before anyone knew what the real ramifications were/are.

On top of that, Apple then went out and bought a 3D imaging/mapping company.

So now the two biggest things Google had going for it on iOS-powered handsets is now firmly in the grasp of Apple. Because now Siri servers handle voice search & can route them through who THEY want (Wolfrom Alpha, Bing, whomever), and the mapping information will be in-house, as well.

With those two tentacles cut off, Google loses Mobile Search in a huge segment of the marketplace (over 50%). Google also finds itself behind the 8-ball on innovating mobile search.

One place they did very wisely take the long approach with was Android. They haven't made real money with it yet, but they kept themselves squarely in mobile ads & mobile search discussion thanks to that acquisition.

You couple this with the biggest emerging market of all-China-and you have to realize Google's behind their 8-ball there because the Chinese Government is NO friend of Google in case you haven't kept up. Also take into account the huge presence Apple has with factories & labor in China, & they have a much larger presence as a stakeholder in mobile in that emerging market, & a much more cordial relationship with the Chinese Government as a result.

Now turn back to Zuckerberg & Instagram...and you see a company that's about to be flush with a huge amount of cash, & sees a home-grown social network that's got 30 million people (not even counting Android which they just came out for this week) on iOS devices, & by throwing his net around Instagram, you've got your engineers (who are on their worst day 20 billion times better than Instagram's), & you can integrate the picture sharing into Facebook.

Facebook's been all about the beauty and layout, especially with the new Timeline. Instragram makes sharing photos-which are front & center with Timeline-even more visually appealing & even neater.

Making the experience more fun & neater means people will experience it more & use & contribute & share more. Makes perfect sense since Zuckerberg's whole model is I want to know everything about you.

It's also a way to keep Instagram out of Google+'s clutches, which could've proven just the bump they needed to make Google+ more relavant, thereby making FB less relavant, & making Google's attempts to deliver more relavant ads to you more effective.

Lastly, look at the fight over the future of HTML5. Anyone with half a brain could've seen how prescient Jobs was with refusing to use Flash. He saw this on the horizon. It seems that Facebook & Google are going to battle it out for HTML5 devloper standards for Apps. Whomever can convince more app developers that their standards are more simplistic & user friendly will win the best developers. Who will bring the best apps. Who will bring the most eyes. Who will bring the advertising dollars.

Let's boil this all down.

Google is trying to fight wars on several different fronts, because as many great things as they came up with, they still haven't differentiated themselves yet as anything more than a search company that gets by on ad revenue.

There are other titans in the tech world that are making rainclouds that are gathering more and more ominously on Google's horizons. If Google doesn't win some key fights coming up (pulling a Lazarus routine on Google+, winning HTML5, helping device/hardware makers truly compete in the tablet market), it risks slowly becoming the next AOL or Yahoo.

May be a kind of convoluted rant, but this is just my opinion...

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The one that I think is worth a mint is pinterest. It's a site where literally the sole reason for its existence is for girls to display the clothes they want to buy, the foods they want to cook, the books they want to read, the movies they want to watch. FB and instagram are inherently photosharing apps, and the data mining is kind of a spinoff of that. Pinterest skips that part entirely; there's no pretense here, it's just somewhere to tell all your friends things you want to buy. Talk about a targeted advertiser's wet dream.

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The key thing that most of these companies are still struggling on how to do is monetize their audiences in terms of advertising.

Twitter failed miserably with those Sponsored Tweets they were doing. I still hate their most recent redesign but I appreciate the information that I get from the people I follow too much to go back to the clunkier versions before they got into the platform design business (Twitterific, Echofon, etc).

No, what FB was going after on Instagram wasn't how to make money off of their community (though a community of 30 million on only iOS smartphones that was built by 13 people is wildly impressive compared to what FB has done with their legions of hackers & programmers/engineers). What they were looking to do was two-fold.

They spent $500 million to keep Google+ sucking. I'm almost positive that Instagram would've made either FB or Google+ cooler. But by keeping it away from Google+, they keep Google+ from getting a ready-made, home-grown social network of 30,000,000. That's big. Very big.

The other $500 million they spent was to make Facebook's push for Timeline even cooler & more user pleasing. Timeline itself is a big admission on their part that aesthetics, design, layout & pleasing the user's eyes is more important to them. Their photo-sharing methods right now aren't the best in that department, though I think Timeline's a step in the right direction (look past the billygoat bleaters complaining about the way it used to be).

Integrating Instagram into Timeline & the photo-sharing process in general is HUGE for them. It makes the photo-sharing process more fun and more pleasing to the eye.

Focusing on user interface, ease of use, & user choice & customization on things as basic as photo-sharing is how Instagram built a community of 30,000,000, and its how Zuckerberg realizes he will get even more FB users to share more and more and more.

He will make people use FB more with Instagram. Remember, the more people that use FB, the more ad dollars flow to FB (and conversely, away from Google).

He will make Google+ continue to suck by not allowing Google to truly use Instagram they way they want to.

Its a win-win. Definitely worth 1 billion to him.