Finance

Facebook's Billion Dollar Bet: Why did facebook buy instagram

In the emails, Zuckerberg said that there are some small tech companies with millions of users (like Instagram at the time) that are growing quickly but don't make any money yet

Published: 21-Apr-2024 Updated: 21-Apr-2024

Facebook Instagram acquisition:

 

In 2012, Facebook paid a surprising amount of money, $1 billion, to buy a photo sharing app called Instagram. Back then, many people thought Facebook had overpaid. Today, Instagram is a hugely popular app and worth much more, over $500 billion! This shows how good Facebook's CEO, Mark Zuckerberg, was at guessing what would be important in the future.

 

 

Mark Zuckerberg leaked emails Instagram:

 

There were recently some emails found online that supposedly show Zuckerberg talking to his financial people about buying Instagram. The emails aren't for sure real, but they give us some ideas about what to think about when buying another company.

 

Why did Facebook buy Instagram

 

 

 

Why did Facebook buy Instagram:

 

In the emails, Zuckerberg said that there are some small tech companies with millions of users (like Instagram at the time) that are growing quickly but don't make any money yet. He worried that these companies could become a big threat to Facebook if they kept growing. Zuckerberg thought that by offering these companies a lot of money, like $1 billion, they might be convinced to sell even though they didn't originally want to.

 

 

Facebook Instagram acquisition:

 

Zuckerberg's financial advisor, Ebersman, agreed that buying Instagram could be a good idea. He thought that Facebook could improve its own services by connecting them with Instagram. But he also said it's important to have a clear plan for how to do this and to make sure it's not too expensive.