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Why Did Facebook Pay $1B CASH for Tiny Startup Instagram?

by Jonathan Gilliam, Momentum Factor


Colossal acquisition of tiny startup Instagram, in advance of the Facebook IPO. Was it worth it for Facebook?

Let’s consider what they get when they bought Instagram:

1. Local data: “where were you when you took this photo?”
2. Personal data: “what are your photos about.”
3. Quash a strategic threat: Photos are where it’s at in social.
4. Monetize mobile: Facebook made no money on mobile, until now.
5. Acquire talented mobile team.

Instagram is a steal for Facebook and a smart strategic move.

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