FACEBOOK10 billion dollar takeover Instagram controversy continues

Source: Internet
Author: User
Keywords Social networking Facebook instagram foursquare startups mobile phone photos prototypes facebook andrid hunch entrepreneurship News

Recently, FACEBOOK10 billion dollar acquisition Instagram, really let this video site again a fire. And the acquisition knot has also brought countless discussion topics, people disagree.

If only the magnitude, the two companies that took place in this transaction are the differences between trees and grasses. Its valuations have reached $100 billion trillion since the announcement of Facebook's IPO. The acquisition of Instagram cost 1 billion of dollars-for the Big Mac, it's just change.

People have a negative attitude towards the deal. On Twitter, "More than 35% of people are angry about the deal", "the acquisition will surely destroy Instagram" and "a small company that is unwilling to like it is being bought by a big, distrustful company."

How should Facebook and Instagram's takeover be judged?

History of the 1 August

Instagram is not the first photo network-sharing service provider, nor is it the only social app. But when the camera software integrates photo descriptions, recording locations, focusing on social attributes such as "praise", it becomes the first image-centered social map in history.

Kevin, 28 years old, worked for a year in Google's acquisition department after graduating, and then went to Nextstop, a start-up company engaged in a travel business. No computer degree, no formal training, but he insisted on self-study programming after work. After the start-up company was acquired by Facebook as a talent acquisition, Kevin went to an early Twitter internship for a while. But he had always wanted to do something independent.

Mike, however, was a rather low-key engineer and user experience designer. He worked 1.5 in a start-up company called Meebo, where he took a bunch of high school students to test the user interface for Meebo applications.

"The story starts when I work in Nextstop. I was in marketing and had some simple ideas, so I started learning to program at night (I didn't get any formal computer science degree or related training). One idea is to combine Foursquare and social game Mafia wars elements (hence named burbn). I think I can use HTML5 to develop a prototype product and then give it to my friends for trial. They ended up using this prototype product that didn't have any brand elements or designs at all. I spent a few weekends improving the product for them.

At the hunch party of the start-up company, I ran into some people who turned burbn into reality.

At that time, two baseline ventures and Anderson Hollowitz (Andreessen Horowitz) were present at the venture company. I showed them the prototype, and finally we had a coffee talk. After the first meeting, I decided to go it alone and see if I could build a company on BURBN. Two weeks later, I invested 500,000 dollars in the two companies and started looking for a team.

October 6, 2010, Instagram iOS version online.

On the day of release, the user reached 25,000, and the registered user was over 1 million in December. Each person uploaded about 3 photos, Instagram became a picture library with millions of pictures. At this time, Instagram only 6 employees.

Four elements for user photos, labels, locations, and geography. At this point, the Instagram of 2 million users completed a round of financing of a 7 million dollar. Each month thereafter, Instagram refreshes the record of the number of new users. Before the deal, there were 30 million users.

The Andrid version was launched in 2012 and the download volume exceeded 1 million.

Kevin appeared in Beijing last October. He claims to be the Instagram of an evergreen company, "Instagram has found its place in the chaotic market, and the task is to become stronger." ”

In the age of mobile internet, Instagram is a clever product. It accurately grasped the boom in smartphone photography and social networking, led user behavior with ingenious design, and the machine focused on developing mobile products, not the web side, and 1.5 waiting for the iOS version to stabilize before launching the Android version.

All is well at this time.

But no one thought: the flash of the acquisition of the drama will be staged.

April 6, Instagram just announced that the Sequoia led the B round of financing for 50 million U.S. dollars, and VC Instagram at this time the valuation of 500 million U.S. dollars.

3 days later, April 9, Zuckerberg announced on his Facebook page that he would buy Instagram at a price of $1 billion. Kevin seemed to be back at the crossroads and had to make a choice. Had missed 2004 years of Facebook's start-up and left Dorsey's studio shortly before Twitter was born in 2006, and this time he accepted the offer.

No one knows what Zuckerberg talked to him about.

That is, a product of an ambitious, independent, graphic social networking company is part of another big company.

While most of its users are on Facebook and Twitter at the same time, the social networking logic expressed through independent images is completely different. While it can still be bundled and shared with Facebook and Twitter, how to integrate with Facebook has become a mystery to all users.

Probably not even Kevin himself. In the blog's open letter, he said: "Instagram will not stop the service, but will add more features to support the sharing of multiple social networks, although the future will be integrated." ”

What the hell is this?

For the vast majority of technology companies in the takeover case, there are only two purposes, one is to see a new, interesting technology, to supplement their own short board or to make their products more dazzling better use, the other is to be possible to develop their own opponents of the company to defend. But the acquisition is somewhat different.

Instagram is already a relatively mature start-up company, although it has only 13 employees, but behind a separate product and tens number of users.

Big companies, such as Facebook, typically buy products that are only start-ups, with a maximum of tens of millions of dollars, and they quickly use technology for themselves after acquisitions. So why is Facebook willing to make an exception for Instagram?

According to statistics, pictures uploaded to social networks by Instagram in 2011 accounted for 13% of the total picture. In April this year, the data was raised to 33% after the release of the iOS version of the 21%,android version of Instagram. While the actual benefits of these images have not yet been seen, Instagram's rapid realization of the social attributes of pictures via mobile devices makes Facebook extremely uncomfortable.

Let's imagine a scenario that actually applies what you see, take out the mobile phone to photograph, and then upload the online, without Instagram, you need to take photos of the mobile phone, waiting to go home or find a place to open the computer, to find a way to connect the data line, photos into the computer, simple repair map, and send it anywhere you want. If it becomes so complicated, how can the user remain interested in it?

Speaking of which, I have to mention another picture to share the product path. The founder of Path, Dave Molin, an early Facebook employee who participated in Facebook's product design, was Mark Zuckerberg's first venture partner. Unlike Instagram, path follows the logic of social networking, creating a more intimate social network based on real relationships. In contrast, the Instagram has more quality pictures, and the path user is more concerned with the real life in the circle of acquaintances that the picture expresses.

That, in part, explains why Zuckerberg eventually chose Instagram, if only from the number of users. And, he said in his blog: "We do not plan to continue many of these transactions, and may not even do so at all." "But maybe, just because he heard that Instagram had completed round B financing, Zuckerberg jumped."

How to spell the puzzle

How much value can Instagram bring to Facebook? More people think of the depth of data mining. From this huge gallery to get users like to go to the place, like to do, like to see the information about the scenery, and then develop the related products, in the Facebook will add a lot of value. Not only can increase revenue, but also for themselves to destroy a strong potential opponents, this matter?

The origins of the 1 billion-dollar price, known as Zhang, read: "Instagram: Both are potential rivals, and Instagram is one of Facebook's biggest potential challengers." Premium。

Facebook may be Instagram for similar products. But Facebook's dominance in the mobile world is weak, and VC worldwide wants to invest in the Instagram fight. 13 people, burn rate is very low, but has more than 40 million dollars in cash.

Android version of the Instagram release, 50 million users during the year is no problem.

Facebook's active subscribers for the month of January were 650 million, valued at 100 billion dollars. The average active user is worth 153 dollars.

Facebook: Mobile photo-camera products are more like feature, and it's not easy to become a great independent company.

Instagram does not have a significant daily social trend and is still the photo-store area.

The picture community on the phone doesn't have a profit model, and it's harder to form a profit model than a PC.

With two founders now owning half the company and wanting to play an arms race with Facebook, they need to keep raising money and diluting their stakes, and when the company's value is really 1 billion dollars, your price has been diluted below 500 million dollars. Why not present it now? And Facebook has a chance to rise on a listed stock.

Facebook's previous acquisitions have been good, with all the top executives of the buy-out companies at the heart of Facebook.

This big puzzle, once again shows the brutal Internet business survival rule: the resources are limited, it is difficult for startups to insist on independence, and being bought by Giants is not bad. Chinese netizens have long imagined how Instagram survive in China, perhaps in the early days of its inception, Tencent would throw an olive branch on it; perhaps the first problem facing VCs is "how do you guard against Tencent"; perhaps 13 of people's teams are still struggling to dig horns in half a year.

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