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Facebook buys Instagram
#1

Instagram is pretty popular in the iPhone (and recently Android) world as well - basically it's an app which allows you to apply vintage effects to photos and also publish it to an online stream. I use it myself and it's a nice and simple way to make your camera phone images to "pop" although I'm sure it will make many purists grind their teeth.

Anyway, Facebook obviously sees a lot of potential for Instagram, so much so that they have paid 1 Billion (yes BILLION) to acquire the company.

My mind can't even begin to fathom how an app that exists in the "virtual" or online space can be worth that much. To put it into perspective, it's enough to purchase the ailing Kodak company, 12 times over! It is true that the company is facing bankruptcy and all that but it's an actual company with bricks and mortar factories, over 7600 staff and plenty of intellectual property in its portfolio the form of patents and research - vs a tiny application which may or may not exist in a couple of years once the hype dies down.

Anyway, you'd be laughing all the way to the bank now if you were the creator or founder of such an app...
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#2

It is hard to imagine how Instagram can be worth 15% of Sony's worldwide losses for all of 2012…

(was that cynical? It sounded cynical… Big Grin)

My immediate thought was to wonder what percentage of Instagram photos are tagged with GPS/location information. Facebook is an advertising company that specializes in data aggregation and analysis, so I'm interested in seeing how this all works together.

matthewpiers.com • @matthewpiers | robertsonphoto.blogspot.com | @thewsreviews • thewsreviews.com
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#3

Ha ha...

More commentary, alluding to a possible social media tech bubble:
http://www.theatlanticwire.com/technolog...ble/50912/

1 Billion for a free app that has no revenue / model, that has so far existed on just VC capital? Mind boggling...
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#4

I still can't get my head around the fact that a company with no proven revenue can be valued in the billions. Well, Forbes magazine compares it to Shutterfly, another 1 billion dollar valued company with an expected $582 million in revenue this year.

I know which one I'd rather buy... Big Grin

http://www.petapixel.com/2012/07/04/1-bi...instagram/
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#5

That comment about Kodak really hurt... and if my father ever saw that he would probably die. He worked for Kodak for 20+ years, and when I was a kid we spent a few years in Rochester NY on the company's money. But I agree with you that it sounds crazy to buy it for that much, especially when you see what's happening with the Facebook shares these days. Overpriced and basically no room to grow. All they can do is clutter it up with more ADs it seems.
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#6

Yeah it's crazy to see what has happened with Facebook - they're basically trading at 1/2 of the value that they initially launched at.
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#7

Looks like the end is here - Kodak are getting rid of their consumer divisions, to focus on commercial and enterprise services instead. They are looking to sell these units, although it's not certain what will happen once these get sold off - whether they will continue the Kodak branding or perhaps merge it like what happened to Konica/Minolta.

Furthermore, they're looking to sell their patent portfolio to raise up to 2.2 billion to drag them out of bankruptcy...

http://www.dpreview.com/news/2012/08/24/...d-for-pate
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#8

"Kodak goes bankrupt and Instagram is worth a billion dollars. 2012, y’all." Ben Jacobs
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