What 1 Billion Represents for Instagram & Facebook

The number “One Billion” means two key things for both Instagram and Facebook. We’ve all seen how in the past days, a company that had no defined Business Model went from zero to a $1 Billion USD worth in under 18 months. This past sentence rises several questions, so let’s take one at a time.

  • How did Instagram survive 18 months without a monetized mobile business?
Instagram has had several rounds of funding that have fed the company and its multiple developments. This is the most basic piece of information according to Crunch Base. The company has had a rather small staff, and its product has been rather attractive to investors, SO MUCH that well, Facebook just bought it.
  • Why did Facebook pay $1 Billion dollars for a company that offers an entirely free service with no monetization?
After several valuations, the company has risen its value overtime. But it’s not just about what Instagram is worth alone, but how much Facebook can take advantage of. This price tag is really more about what Facebook can do with Instagram’s product. Although they have clarified that Instagram will remain as an independent app from Facebook, with separate functionality, Facebook is in for a gold mine of data.
To further grow its databases, Facebook can sell better advertisement placements and targeting with an expanded data base. Instagram can provide Facebook with particular tastes of niche users with very peculiar activities.
  • Where is Facebook standing in terms of number of users right now?

Facebook has 901 million users at the moment, with predictions of it reaching 1 billion users before the year ends. The largest social network is still at a growing stage definitely. More numbers, more power to them.

Overall, many have protested about Instagram’s purchase, threatening to close their accounts (or have closed them altogether). Which makes sense given that it’s human nature to reject change.¬†However, Instagram also grew 40% in number of users in a period of 30 days, give or take. In any case, the world still spins, and two great companies now operate under the same umbrella.

Leave a Reply

Your email address will not be published. Required fields are marked *