Facebook acquired Instagram four years ago for $1bn when it was just a two-year-old start-up
Photo-sharing social network Instagram has reached the critical milestone of 500m users, giving it far more users than Twitter, but it still needs to watch Snapchat in the rear-view mirror.
On a Monday in April 2012, the news broke that Facebook was acquiring Instagram for $1bn.
That may seem like small change when you consider the massive valuations of today’s unicorns (Uber is estimated to be worth $62.5bn and Airbnb is worth $25.5bn) and certainly pales in comparison to Microsoft’s $26bn acquisition of LinkedIn last week. It also pales in comparison to Facebook’s purchase of WhatsApp three years later for $20bn.
‘An image can convey an emotion, a thought, or a message that we can all understand. 500m people mean 500m windows into the world’
– SHERYL SANDBERG, FACEBOOK
But, at the time, people were scratching their heads, wondering if Facebook paid over the odds for Instagram. You would have to also wonder what Instagram would be worth today if it had resisted Facebook’s attentions.
Picture the social network of choice today
Instagram was created in San Francisco in 2010 when founders Kevin Systrom and Mike Krieger chose to focus their multi-featured HTML5 check-in project called Burbon on mobile photography instead.
Ask any teenager today what social media apps they are using and they won’t say Facebook (“it’s like a family dinner party”) and they won’t say Twitter because it is considered too confusing to use.
There are only two social networks younger users are currently interested in: Instagram and Snapchat, which recently surpassed Twitter in terms of daily users. Snapchat has 150m users every day, ahead of Twitter, which has less than 140m daily users.
Instagram is an investment that is paying off handsomely for Facebook, said COO Sheryl Sandberg.
“One of the many things we’ve learned from Instagram over the past five years is the power of visual communication. Images are universal – it doesn’t matter what language you speak or where you live in the world.
“An image can convey an emotion, a thought, or a message that we can all understand.
“500m people mean 500m windows into the world.
“As new voices continue to join the conversation on Instagram, these windows become even more diverse – broadening our perspectives, bridging the distances between us, and inspiring our sense of wonder,” she said.
Instagram image via Shutterstock
