29 April 2012

Will Instagram Be a Billion Dollar Flop for Facebook

It may seem hard to believe that a billion-dollar acquisition could be ignored, but consider these facts: Photo-sharer Instagram has 13 people on staff; Facebook has more than 3,000. Facebook’s valuation is arguably 100 times Instagram’s. Facebook, with its initial public offering approaching, and the exposure and pressure to grow that comes with being public, is going to have its hands full of top priorities. Many of those priorities will have more at stake than a billion dollars. And let’s not forget that Facebook is likely to use its soon-to-be-public stock and IPO cash to make additional acquisitions. Many of them may be small companies with technologies that Facebook wants to plug into its burgeoning network. Those companies, too, could get lost in Facebook.

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