Facebook purchased Instagram on Monday, April 9th 2012 for $1,000,000,000 US. Instagram, a free to use image sharing iPhone application, has absolutely NO REVENUE STREAM. The application is free to download, free to use, and has no monetization support from advertisements.
$1000000000.00 / 30000000 users = 33.33 per user
At the time of the sale Instagram had 30 million users in total (30,000,000). That means Facebook just paid heavy $33.33 per user… This is obviously a bad deal for Facebook.
Instagram did not have a method to monetize its application. I hedge my bets that Facebook will never recoup the one billion dollars spent on this deal.
Mark Zuckerburg, I just thought up the perfect T-Shirt for you:
I just purchased Instagram for 1B and all I got was this lousy image filter.