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Thread: Oh to be an Instagram venture capitalist!

  1. #1
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    Default Oh to be an Instagram venture capitalist!

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    Not bad for an app that is 2 years old...
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    Funny! I was just reading yesterday that Instagram has a staff of only 10, and had yet to really find a reliable revenue stream. Guess they found it huh?

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    Article says there are 13 of them and there on for $77million each...

    More DotCom crazy.
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    Quote Originally Posted by rjd View Post
    Article says there are 13 of them and there on for $77million each...

    More DotCom crazy.
    The board of Kodak must be feeling pretty gutted right now......

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    Quote Originally Posted by rjd View Post
    More DotCom crazy.
    Insanity!

    I think the market cap of Nikon is about $10b. Maybe if they add some crazy filters to the D800 and D4 they can be worth $11B.
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    Quote Originally Posted by rjd View Post

    More DotCom crazy.
    Not so sure it is. Facebook hasn't been going nuts spending cash on acquisitions, and has proved itself to be a pretty sharp operator - so they've probably done the numbers and research well. At the end of the day, most of the world isn't too worried about having a flash camera, it's all about the fun and the sharing, and smartphones and apps like this are finding massive amounts of users compared to a couple of years ago even.

    Could be a real shrewd move that will end up sewing up the majority of the consumer photographic market into the Facebook empire. Presumably there's huge earning potential out of that.

    Dotcom crazy was, for example, doubling a bricks and mortar business valuation simply because it set up an online shopping site, with investors not really understanding the model. The same mistake is unlikely to be made by the likes of Facebook.

    Would have been great to be an angel investor in instagram though...ker ching...

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    You think paying $1bn for effectively one app that has many many similar competitors, that is free and that doesnt make money , that doesnt know how it would make money, is a good deal?
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    Is this one of those programmes where you spend lots of money for a camera to take nice pics, then ruin the photos by trying to make them look old?

  10. #10

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    Its one of those free programs that make your 21st century digital camera look like a 1950's polaroid or holga yes. Then it lets you vacuously share it with anyone of limited taste and intelligence.
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    Quote Originally Posted by rjd View Post
    You think paying $1bn for effectively one app that has many many similar competitors, that is free and that doesnt make money , that doesnt know how it would make money, is a good deal?
    No, I'm just not arrogant enough to think that I'm smarter than Mark Zuckerburg, his board, advisors and major investors, who are probably in the position to make a $1bn investment because they are smart!

    They've got a pretty good track record at the end of the day, and have made a selective investment. Chances are it was a considered and smart move, that for the rest of us, on the outside looking in, at this point in time, will have little chance of understanding the rationale behind. Time will probably reveal all....Not every tech business follows the Microsoft model of repeated failure.

  12. #12

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    Quote Originally Posted by mrfinster View Post
    Not every tech business follows the Microsoft model of repeated failure.
    Heres me thinking microsoft have made a bundle every year for decades....

    Did they really need to pay $1bn for it? Would $500million have been enough? or $250million?

    Its hard to place a value on something that really has no ability to make money at the moment.
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    Quote Originally Posted by rjd View Post
    Heres me thinking microsoft have made a bundle every year for decades....
    From certain parts of the core business, which pays for repeated c0ck ups elsewhere

    It would be interesting to know how the valuation was done on the instagram transaction, I guess a lot of the price was paid in stock as opposed to cash? It could be that by buying it, they have increased their own valuation by more, so make money on the purchase.

    Anyway, I'm trying to get my zune to play nicely with my windows tablet pc, and get some apps on to my windows mobile device, so gotta go, it's not easy

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    Really only the online services division isnt making money (msn, bling, windows live cloud etc). Not sure they are even trying to make money on it.

    BTW which idiot bought a zune?
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    Quote Originally Posted by rjd View Post

    BTW which idiot bought a zune?
    Very few!! Hence my comments!!

    Can you find a graph about how many $$ have been invested into online services, entertainment and devices by Microsoft? Because I think the graph you just put up proves my point on that one. They make no money but sling a lot of cash at it......

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    Entertainment and devices has made a bundle since then (2009) and is well in profit for its life due to xbox 360 and kinect. WP7 is in there and isnt doing great , the $bns MS paid nokia is easily covered by xbox.

    Online services wont make money for years , not sure they have ever intended it too.
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  17. #17

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    Just checked 2012 stuff here , whizzy graphs, Entertainment seems to be doing $0.4bn profit, online -$.5bn so kinda cancel each otehr out.
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    Quote Originally Posted by rjd View Post
    Heres me thinking microsoft have made a bundle every year for decades....

    Did they really need to pay $1bn for it? Would $500million have been enough? or $250million?

    Its hard to place a value on something that really has no ability to make money at the moment.
    Maybe they were paying for its user base rather than the app itself? Dunno, hard to see the app lasting too long, but at the moment Instagram is pretty popular. Maybe the same reasoning Zynga bought Draw Something?
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    Oh the money is 100% for the user base. The app itself you could knock up in a week.
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    Quote Originally Posted by rjd View Post
    Oh the money is 100% for the user base. The app itself you could knock up in a week.
    Yeah I was more responding to what you said in an earlier post:

    Quote Originally Posted by rjd View Post
    You think paying $1bn for effectively one app that has many many similar competitors, that is free and that doesnt make money , that doesnt know how it would make money, is a good deal?
    So the fact that the app is simple and probably won't make money isn't relevant. It's whether paying $1bn for those users is a good deal or not..... I guess Facebook think it is. Or maybe they are just after world domination at any cost.
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    They're probably after the synergy of combining the photographers with the Facebook connectivity - gives a new angle to sharing pictures, and possibly additional revenue streams.

    What they end up with is a 21st century polaroid camera/kodak style business I guess.

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    Facebook are struggling a little on mobile devices where google+ twitter and instagram etc are doing well.

    FB are very mobile focused so I guess it makes sense to buy their way in, not sure $1bn make sense though...
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    Spending 1% of your worth to add a second, rapidly growing income stream that you don't currently have and is strategically important seems like a good plan to me.
    Going in with a large offer takes away the option for shopping around and dragging out negotiations when FB have an initial float coming up. If having the deal sown up raises the stock value by more than 1%, it's a win-win.

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    Quote Originally Posted by rjd View Post
    Facebook are struggling a little on mobile devices where google+ twitter and instagram etc are doing well.

    FB are very mobile focused so I guess it makes sense to buy their way in, not sure $1bn make sense though...
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