Facebook Buys Instagram For $1 Billion

VIA Forbes

Facebook is buying Instagram, according to this post today from Mark Zuckerberg. The purchase price of $1 billion will be paid in cash and Facebook shares. From the blog post:

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

With Instagram Buy, Mark Zuckerberg Shifts Facebook Into Acquisition Mode Robert Hof Robert Hof Contributor
Facebook’s Buys Instagram For $1 Billion: Mobile Is The Future Tomio Geron Tomio Geron Forbes Staff
If I Had A Billion Dollars, Would I Buy Instagram, AOL, Or A House? Ewan Spence Ewan Spence Contributor

Instagram rocketed to 30 million iOS users in 18 months and was named iPhone app of the year in 2011. It is one of the best apps for taking and sharing photos from the iPhone. Its square images and assorted image filters let anyone make retro, techno and pretty pictures out of mundane shots of their kids, pets, food. Instagram’s Android version, released last week, got millions of downloads immediately. But $1 billion, if true, is still a crazy number. Instagram doesn’t make any money. Nor did it say it was focusing on revenue. It is still chasing big users. Kevin Systrom, Instagram’s CEO, wrote this to calm down his users in response to the deal. An excerpt:

It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.

It’s not clear what the Facebook deal means for the Series B funding round that may have closed last week, led by Sequoia Capital, Thrive, Benchmark and Greylock at a reported $500 million valuation. But the fact that Facebook would pay 2x what the company was supposedly worth within a week’s time suggests this is a defensive move. Facebook has the money (almost $4 billion in cash on hand as of December 2011), and certainly isn’t desperate for more users, most if not all of whom are already on Facebook (which greatly influences the price-per-new-active-user Facebook is paying. See crude math below.)

Fred Wilson has said that Facebook is really about photos and this only underscores that. The mobile-social photo sector is still amorphously led but if anyone is harmed by this deal it is Yahoo. Facebook is really going after its Flickr property here, to put the nail further in Yahoo’s coffin. (To its discredit, Yahoo hasn’t done anything with Flickr lately). Zuckerberg is playing chess, making a defining move in how it stands in the photo space. It’s like what Google did with YouTube.

One problem this will solve for Instagram’s 30-something million users is that sharing an Instagram photo on Facebook from your phone pretty much sucks right now. Here comes the much needed integration: bigger photos, more detailed info about the filters, etc. Right now all you get when you post an Instagram photo on Facebook from your phone is a small link and a thumbnail image. A better integration will stimulate more sharing through Instagram.

But a $1 billion for 30 million users that pay nothing for the service? Sounds crazy but consider this: Instagram is getting bought for $33 per user. Facebook is supposedly trading with a market cap of close to $100 billion and has 850 million users, giving it a value of $117 per user. So it looks like a decent bit of funny-money arbitrage, using well-endowed Facebook shares to acquire users and solidify hold of a strategic asset at a lower valuation. We don’t yet know how much of the deal is in cash vs. stock, so this calculation could be less favorable sounding but it still makes sense with Facebook currency.

Here’s a video Forbes editor Michael Noer did with Instagram CEO Kevin Systrom for our 30 Under 30 special. According to Wired’s Mike Isaac, Systrom netted $400 million from the sale.

~Signing Off~

KONY 2012

KONY 2012 is a film and campaign by Invisible Children that aims to make Joseph Kony famous, not to celebrate him, but to raise support for his arrest and set a precedent for international justice.

Donate to Invisible Children: https://www.stayclassy.org/checkout/set-donation?eid=14711
Purchase KONY 2012 products: http://invisiblechildrenstore.myshopify.com/
Sign the Pledge: http://www.causes.com/konypledge

DIRECTOR: Jason Russell LEAD EDITOR: Kathryn Lang EDITORS: Kevin Trout, Jay Salbert, Jesse Eslinger LEAD ANIMATOR: Chad Clendinen ANIMATOR: Jesse Eslinger 3-D MODELING: Victor Soto VISUAL EFFECTS: Chris Hop WRITERS: Jason Russell, Jedidiah Jenkins, Kathryn Lang, Danica Russell, Ben Keesey, Azy Groth PRODUCERS: Kimmy Vandivort, Heather Longerbeam, Chad Clendinen, Noelle Jouglet ORIGINAL SCORES: Joel P. West SOUND MIX: Stephen Grubbs, Mark Friedgen, Smart Post Sound COLOR: Damian Pelphrey, Company 3 CINEMATOGRAPHY: Jason Russell, Bobby Bailey, Laren Poole, Gavin Kelly, Chad Clendinen, Kevin Trout, Jay Salbert, Shannon Lynch PRODUCTION ASSISTANT: Jaime Landsverk LEAD DESIGNER: Tyler Fordham DESIGNERS: Chadwick Gantes, Stephen Witmer

“02 Ghosts I”
Performed by Nine Inch Nails
Written by Atticus Ross and Trent Reznor
Produced by Alan Moulder, Atticus Ross, and Trent Reznor
Nine Inch Nails appear courtesy of The Null Corporation

“Punching in a Dream”
Performed by The Naked and Famous
Written by Aaron Short, Alisa Xayalith, and Thom Powers
Produced by Thom Powers
The Naked and Famous appear courtesy of Somewhat Damaged and Universal Republic

“Arrival of the Birds”
Performed by The Cinematic Orchestra
Written by The Cinematic Orchestra
Produced by The Cinematic Orchestra
The Cinematic Orchestra appears courtesy of Disney Records

“Roll Away Your Stone”
Performed by Mumford and Sons
Written by Benjamin Lovett, Edward Dwane, Marcus Mumford, and Winston Marshall
Produced by Markus Dravs
Mumford and Sons appear courtesy of Glassnote Entertainment Group LLC

“On (Instrumental)”
Performed by Bloc Party
Written by Bloc Party
Produced by Jacknife Lee
Bloc Party appears courtesy of Vice Records

“A Dream within a Dream”
Performed by The Glitch Mob
The Glitch Mob appears courtesy of Glass Air

“I Can’t Stop”
Performed by Flux Pavilion
Flux Pavilion appears courtesy of Circus Records Limited

~Signing Off~


Since Thanksgiving falls on the last Thursday of the month, this month’s “A NIGHT OF COMEDY” will be a week earlier.

So come join us again for our 4th “A Night Of Comedy” on Thursday, November 17, 2011 at 3G Lounge (3rd & Girard).

Drink specials include: $1 test tube shots, $3 Martini’s & $10 Corona buckets. Food and bottle service will also be available.

This event will be hosted by comedian Ms. Darkchild and will feature some of the area’s hottest up and coming comedians! This month’s headliner is the one and only “MICHAEL SHAWN” from Power 99’s Jonesey In The Morning Show! Immediately following the comedy show it will turn into an all out Thirsty Thursday Party!! This is an event you don’t wanna miss…

Music will be provided by your’s truly DJ SPONTANE!

Tickets are ONLY $10 for this event! Get them now, or pay more at the door! Tickets are going fast!

Hopefully we will see everyone in the building!


~Signing Off~

Custom Casing For Beats By Dr. Dre


I saw something yesterday that looked dope! On a friend of mine’s blog, he had a pic of a pair of Beats By Dr. See but in the Pre Heat Lebron colorway. So apparently, there is a website that can customize the casing of the headphones. If you order the headphones customized, they will be about $450 and sending them over will be $200 just for customization. It’s crazy but hot!

Signing Off

Oprah Ends Syndicated Show

Oprah Winfrey is preparing to close one phase of her life to focus on another.

It is expected that Winfrey, 55, will announce the end of the Oprah Winfrey Show this Friday. Insiders believe she will now focus on launching her own cable network (the Oprah Winfrey Network -OWN)

The existing program will end Sept. 9. 2011.

~Signing Off~

North Catholic High School In Philadelphia Closing In 2010

This is the saddest news I have heard in some time……besides Cole Hamels pitching today. Northeast Catholic High School in Philadelphia (my high school) is closing after 2009 – 2010 school year. I attended from 2001 – 2005 and there were many memories. It’s sad but sometimes things come to an end.

~Signing Off~