I'm hoping this will launch a discussion, but I'm personally astounded by the news about Instagram's $1 billion acquisition from Facebook. It's not that Facebook can't afford it, but that's precisely the point. They could have developed the same technology for their mobile app for a fraction of a fraction of the price.
Why consider Instagram at all? Well, aside from being a cool photo editing app, they have tapped into a great way to release the artist within and create and share awesome photos. They are essentially a Flickr for Mobile with some different bells and whistles. As cameras continue to improve on smartphones (the iPhone 4s is amazing), the majority of our photo taking, and hence photo sharing, will be done on phones. Instagram has grown explosively over the last 2 years with 30 million users, so clearly they have found a way to answer some photo needs that facebook's app hasn't.
Is that worth a $1 billion? My gut reaction is "Hell No!" After reading up on it, my educated reaction is "Hell No!"
The only way I can think it might make sense for Facebook is that it gives them a competitive edge in time to market. They are now the only big player with something like this and they were already the dominating social force for pictures. Buying a great brand name keep them hip and relevant and it's another reason to log on. Still, I think they should have found the 100 brightest engineers in the world and offered them $1 million each to work for 6 months and develop a kick ass alternative.
