On Monday, Facebook announced their planned acquisition of mobile app Instagram for a cool (cue the evil laugh) one billion dollars. For those unfamiliar with Instagram, the app is a photo sharing program that lets users capture a photo, apply a filter and share on social networks.
A billion dollars is a massive, virtually unimaginable number. Chances are you probably have only ever seen tens of thousands, maybe hundreds of thousands of any one thing at one time. So let’s introduce some reference material starting with a comparison to the recent MegaMillions winning of some 656 million dollar annuity. If you lined up the jackpot value in presidential dollars, you have just shy of 11,000 miles of coins. Comparable, the Instagram reported sale to Facebook lined up with a far smaller diameter coin, the dime, would stretch 11,127 miles. Let’s put this in more thrilling terms. The roller coaster, Millennium Force at Cedar Point in Sandusky, Ohio is the longest roller coaster in North America by distance (and fourth in the world) coming in at 6,595 feet long. Riding Millennium Force 8,909 times would let you travel the same distance as Instagram’s value equated to dimes, but to ride the coaster for that long would take you some 346 hours, which I doubt you would want to spare riding the coaster continuously.
Get this picture yet? Instagram’s value by the Facebook offer is a big deal on the simple side with the sheer amount of cash Zuckerberg’s empire is willing to shell out, but there several areas which need to be watched as the story unfolds. Check the list below for a few of the topics to watch and what has been said already.
Reliability. Reliability. Reliability.
Wired’s Cloudline, posted a nice piece talking about how Instagram’s development process, structure and approach may be an omen for the future of how mobile only apps grow and become valuable. In the end, it is all about how reliable the application is and Instagram proved that their structure is one to study and apply its principles as we move toward a world where more content is in the cloud.
Experience is mission critical.
Face it, well-designed devices, like that of Apple, have put an expectation of higher level design square in the sights of any consumer. If the form is sexy, the function better be the same and judging by the tens of millions of iOS devices in the world, the function is desirable. Instagram may only perform three basic functions, but Facebook has a corner on the market of photos and the added features (and sexy, well-designed interface of the app) make the app’s acquisition be Facebook all that more meaningful.
Young vs. Old
Experience and utility drive people back to mobile devices and ultimately to apps that accomplish both ideas. The people return again and again and on many platforms generate advertising revenue for provider, but as behavior and consumption patterns emerge, we are seeing a disparity between the actions of different age groups. Facebook knows that on average their users are older than that of other social platforms and by adding Instagram it may shift their age groups. Either way, look for expansion by other social networks to garner a larger swath of eyeballs to their platforms and it may be accomplished by acquisitions like Instagram by Facebook.
One last fun fact, with the Instagram cash, you could buy tickets to Cedar Point for 70% of the population of New Jersey, New York and Connecticut, which could be one heck of party.
Author: John Carew