Will Facebook Be Forced Into Other Social Acquisitions?
by Intelligent Speculator
About one year ago, Facebook (FB) announced it was acquiring Instagram for 1 billion dollars which was a very surprising move. Not only was it reportedly negotiated by Zuckerberg over one evening but we also later found out that Facebook's board was only notified after the facts. The most shocking part, though, was the price tag. Facebook was offering $1B (turned out to be $700M because of the decline in Facebook's stock) and for what? A mobile only app built by a 13 member team that had no profits (or even revenues) but a solid base of 30 million users. It still seemed very expensive at the time. Many, including myself, expressed doubts about the idea but gave Zuckerberg the benefit of the doubt. Google's (GOOG) purchase of Youtube for $1.65B, 6 years earlier, had also been seen as crazy by many because of the legal risks, high bandwidth costs, and etc. read more »
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