I was going to write a post on how the $1 billion price tag on Instagram actually makes sense given the context of the acquisition, until I realized that the entire blogsphere and its mom has already written something to that extent. As such, I’ve gathered a couple of posts that I found most interesting during the Facetagram aftermath:
- Andy Baio of Wired magazine did a precedent transactions analysis, breaking the acquisition down to unit economics such as cost per user and price per employee. (Thanks to Albert Wenger of USV for the find, and for providing more nuanced analysis of what those numbers mean.)
- Charlie O’Donnell of Brooklyn Bridge Ventures brings his perspective on the relative price tag, mobile strategy, and how Facebook may be running a little scared.
- Christopher Zinzli at the WSJ gave us a slew of numbers to consider. I’ll add another one to the mix: $35 million (the price for Yahoo’s acquisition of Flickr in 2005).
- Patrick Neeman of Jobvite brings up some negative side-effects of the acquisition for today’s fundraising environment. I do agree that this will only serve to fuel the “we’re not concerned about revenue right now” mindset of fresh entrepreneurs. Instagram’s success story is the exception, not a new rule.
And to wrap this all up, Lauren Leto of Texts From Last Night and Bnter posted a bombastic road map of what-could-have-been for Instagram if they hadn’t sold.