it's not the crime, it's the coverage

[rone]

So Om Malik wrote this thing about what impelled Facebook to buy Instagram.  First off, i can't get past Malik's assertion of "Facebook's achilles heel"[sic] being "mobile photo sharing".  Seriously?  Mobile photo sharing is a hard-driving revenue stream for anyone in this world?  Is there any evidence that this was considered a weakness by anyone at Facebook?  I can lean on my experience and tell you that sharing photos from my Android phone is stone easy to Facebook, because my phone came with the Facebook app installed.  I couldn't've done it on Instagram at all until very recently.  Facebook was worried about Instagram's mobile photo sharing mojo?  I call bullshit.

And calling Instagram "a platform built on emotion"... what the hell is that about?  I wonder if he's an advance Facebook stock share owner, because it sure as hell sounds like he's trying to talk himself into the deal, which is no less than ludicrous.  Who drops $1B, even if most of it is fake money, on an emotion-based platform?  Emotion fades.

Some are comparing it to Google buying YouTube, but others are comparing it to eBay buying Skype.  I think that it's far more likely to be closer to the latter, except worse.  Bottom line: even if, somehow, this turns out to be a good deal for Facebook, it won't be because of them addressing their supposed "Achilles heel", or because of the strength of Instagram's "emotion".

Bonus cluebie: some "business leader" thinks that Twitter "F$($#@ UP in somehow letting Instagram ended up inside of Facebook"[sic], because nothing says "mobile business advisor" than someone playing with ginned-up valuation numbers.

Comments

[ronebofh.livejournal.com]

It's precisely the fact that you're a nerd that biases you against Klout by calling it "numerical noise". If that were the case, it wouldn't be where it is now. Some VC assclown somewhere thinks that the noise is good enough to merit funding.

There are plenty of things that pull eyes off Facebook, and yet Facebook isn't in a rush to buy them. So that's why i think there's more to their dysfunctional decision than your reasons.

[thorfinn]

I expect the people at Facebook have a pretty damn good idea of what their users are actually using the site for... and photos is massive on there.

What's your idea for the "real rationale" behind their decision? Got anything that doesn't violate occam's razor?

As far as I can see, it's a simple two step logic:

1. photo sharing is a massive heavily used feature for FB's users/product - arguably *the* feature that makes it better than anything else in terms of walled-garden draw. It's their equivalent of "search = google".

2. Instagram was pretty much the only mobile photo sharing site that even comes close to competing with that feature and thus pulling those users off FB. (There are other photo sharing sites, but I cannot think of a single one which managed to get 30 million users whilst not even bothering to do anything except an iPhone client.)

That's all there is to it. Any other explanation seems over complicated to me.

I still think it's a ridiculous price - but on the other hand it's completely undisclosed how much of that price is stock, and quite possibly newly minted stock. It could well be 99% stock, for all we know. FB is a private company right now, and just minting some stock at an arbitrary valuation is essentially a license to print fake money, particularly as they have their shiny upcoming IPO which will turn that stock into something resembling real cash.


As far as what VC assclowns will fund, they fund lots of things. It's gambling, pretty much. Lots of stuff VCs fund just falls over, and lots of stuff succeeds that VCs have gone nowhere near. The successes make them enough money that it's worth keeping on betting. So reading into individual cases of funding is, well, not very useful.