IS INSTAGRAM REALLY WORTH 1 BILLION DOLLARS?
Well, it is to Facebook, clearly.
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What patents?, its just a photo taking app that uses standard filter techniques that are open and available in both source code and research papers and have been around for many years.
This isn't about patents its about user numbers. Facebook wants that app to gain access to a popular app. As soon as anything is popular companies want to buy it to associate it with their popular brands to keep their brands popular.
But there is no way in hell its worth $1B. (If I had written it I would have walked away very happy if someone had wanted to give me $1M for it. In terms of coding effort its really not worth even $1M as it could be easily written for much less).
Also the 30M+ users will loose interest in Instagram very soon and so they will be soon looking for the next fad, leaving a very expensive waste of money behind.
Against El Reg's reports about enraged fanboys, Instagram just made #1 in the top free app for the iPhone so it seems its still finding plenty more market to grow.
At this rate - Android numbers are already in the 6 million range - it'll soon have more users than Google+ and who knows how many billions Google has thrown at that thing....
Maybe not such a bad investment.
Only it's traditional to ask what that is so you can figure out if it's worth it.
$100m/yr. Payback in 10 yrs. Not bad.
$10m/Yr. Payback in 1 century. Not good *but* then you'd have to factor in future *growth* That could knock it back down to a few decades.
$1m/Yr Need huge growth in both income *and* number of users. You're either *very* confident or frankly pretty dumb.
So how much does Instagram pull in?