The big deal about facebook buying instagram


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With Instagram now, as part of the Facebook stable, it sets them up well to enter the photo sharing and photo processing space and strengthens their position to take Google on.

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The big deal about facebook buying instagram

  1. 1. The Big Deal about Facebook Buying Instagram!So, Facebook finally sealed the deal for Instagram for a whooping $1 Billion a month ago. Old news inthe fast moving world of Social Media, however here is a low down on this Acquisition.Facebook paid that astronomical sum for Instagram and the work of its 13 Employees. Yes mere 13. Ifone were to look at the bare basics, which amounts to $ 76,923,076 is what Facebook paid to Instagramfor each of its employee! And all this, for just a one year old company!Now the numbers apart, there is a more significant impact of this acquisition. With Instagram now, aspart of the Facebook stable, it sets them up well to enter the photo sharing and photo processing spaceand strengthens their position to take Google on. Both, Facebook and Google have been at it for a while,trying to rein supremacy in the social media space. Google encountered Facebook earlier, with GoogleBuzz which unsurprisingly failed only to lead to Google Wave which bombed too. The two failuresenabled Google to rectify their mistakes and in came Google Plus, a direct rival to Facebook.While Google plus still doesn’t boast of the following that Facebook has or even its overall appeal, theirHangouts feature lead to a street fight to acquire Skype. Despite losing out on Skype, Facebookmanaged to survive the Video chat surge. Meanwhile, Facebook mail was launched as well which startedto give Facebook an all round feel as a company.Cut to 2012, Mark Zuckerberg was prepping for the biggest event of his life and his company, an IPO.Facebook aims to raise about $10Billion through the IPO which will evaluate the company at astaggering $ 96 Billion.The acquisition of Instagram goes a long way in strengthening their proposition to the masses as welland rouses further buzz around the IPO that they are willing to invest and keep the company growingand moving towards newer grounds all the time. Why did Mark Zuckerberg, Facebook’s level-headedbut mercenary founder, buy Instagram at twice the valuation that professional venture investors wereputting on it? The answer is found in Zuckerberg’ own blog post:“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a productand company with so many users. We don’t plan on doing many more of these, if any at all. Butproviding the best photo sharing experience is one reason why so many people love Facebook and weknew it would be worth bringing these two companies together.”This clearly reeks of “Damage Control” or “Crisis Management” so to speak. With Instagram alreadyboasting of over 30 million iOS users and then opening itself up to the Android world, Facebook ran therisk of losing one of its core value propositions which was to share as you go. A major part of this beingpictures. Let’s face it, we all love uploading pictures on the GO on Facebook and Instagram was rapidlytaking that ground by storm. - Deepak Ramesh
  2. 2. The timing of this acquisition is really what the best thing about the whole deal is. Facebook now hasInstagram which has both Android and iOS users and further cements Facebook as a firm favoriteapplication on Android more so because Instagram too is now part of their stable.It remains to be seen how Google will respond to this acquisition, Picasa which is Google’ photo sharingplatform surely needs more sprucing up and a more robust photo processing application to go with it.As this race to Supremacy heats up further, it only promises to give the consumers more innovation,usability and options! - Deepak Ramesh