Practical Technology

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Facebook + Instagram = one big acquisition flop

I know, I know. Facebook’s acquisition of Instagram hasn’t even been finalized yet and I’m already calling it a complete waste of a billion dollars. How can I say that? Easy.

Let’s look at the facts, shall we? Facebook paid about $28 for each of Instagram’s 35 million users. As such things go, that doesn’t seem so bad

— as long as Instagram’s users stick around. But the reality is that faithful fans of the photo-sharing program are royally ticked off by the deal. Those who are frantic to get their pictures out of Instagram before Facebook takes over may well be wary of Facebook’s lousy privacy record. If you don’t want your Instagram photos used in Facebook ads, you’d better make sure you have your privacy settings adjusted properly — and then hope Facebook doesn’t change its privacy settings yet again.

Moreover, $28 per user is cheap only if Instagram’s users aren’t already Facebook users. In its pre-IPO S1, Facebook claims it has 845 million active monthly users. I strongly suspect that there’s a good deal of overlap between that 845 million and Instagram’s 35 million.

So when you boil it all down, what Facebook has really bought is some Web 2.0 software for tweaking pictures.

Facebook + Instagram = one big acquisition flop. More >

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