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Comment by nickbarnwell | Hacker News Reader

Positing that Facebook purchased Instagram for its architecture strikes me as odd. They (FB) have solved all of the problems that Instragram faces and more for a userbase roughly twenty times as large, and while the infrastructure is interesting for those at companies aspiring to Instagram's success, for your average systems engineer at Facebook or Google I would think it seems pedestrian in comparison

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I read that title as kind of tongue in cheek. I'm pretty sure Facebook could have built the exact same functionality for less money and in less time as it took to initiate and finalize the acquisition. Winning their users over may have been harder to do. I guess they just figured it would be easier to just buy the users. shrug

Agreed. Also a pretty topical rebuttal to the other flood of articles claiming they were bought purely for the users - widely reported as being valued at $37 each, a number arrived at by assuming there's absolutely nothing else of value in the transaction.

Given the "prices" Google are rumored to be paying to acquire great engineering staff, a team of three engineers who've got a proven track record of building and supporting 100million users on their own - surely they'd be worth some not-down-in-the-noise-floor percentage of even the seemingly insane valuation here?

And a founding team who've "created" $1billion in value in ~550 days? Even if you only credit them with last weeks $500mil rumors - surely that founding team would be worth several tens of million dollars even if you didn't get the company they founded?

They also had ~50 million in the bank after a funding round that was so recent they could not have spent much of the money. Which means FB got a 5% discount on that billion dollar price tag and helps to make all those estimates just that much more reasonable.

Didn't Sequoia make a big YouTube investment suspiciously immediately before acquisition?

This is one user that will be deleting this off of his phone.

Darn-it!

Paying $1B for a company partly because they've "created $1billion in value in ~550 days" is a bit of a tautological line of reasoning.

I can't see this as a user acquisition play. The number of Instagram users that are already on Facebook must be, what, 90%? Maybe more?

So, it's obviously not for talent ($100mm per head? no way...), users, or tech. That leaves it as a competitive play. They took Instagram off the market to keep it out of the hands of Apple and Google.

Whether it's acquisition or retaining, every user owns an expensive phone, the demographic advertisers lust for.

But to keep what out of the hands of Apple and Google? Apple and Google don't need the talent or tech either. Instagram's only real value was users. Competitive play or not... it had to be for the users. What else is there? Break room snacks?

Facebook definitely had other motives for doing this. One such speculation is here http://news.ycombinator.com/item?id=3819245

Others have been for their user base while some say it's for a talent acquisition (which I highly doubt). The title doesn't seem to imply that's why they bought Instagram.

I've got other suspicions too…

I wonder what Instagram's privacy policy says about things like the exif data on all your photos? Almost certainly all geo-tagged. A bunch of data like "how often and how quickly individual users upgrade their iPhones".

Cynical-me wonders how much value FB placed on the non-FB social graph that Instagram built when it hoovered up everybodies contact list?

are companies only allowed to have one reason for their acquisitions? i assume the complexity of instagram's architecture would reflect the technical prowess of the team and this would be very important to facebook

The article mentions they have a team of 3 engineers. You don't pay that much cash for 3 dudes who managed to boot some instances on EC2 and install an off-the-shelf open source stack.

You are depreciating their work in a way that is not that of a real gentleman. Maybe you are also working on a startup and would like to make it to where Instagram guys are? Me too, you know.

And for their tech stack what its impressing is that they chose very wisely IMO: if I had to build from scratch any Web or mobile app I wouldn't do differently (Python n PostgreSQL, etc)

He's being a bit flippant but his point is correct. You don't spend a billion dollars just to get three engineers, no matter how clever they are.

I don't know... These ones were clever enough to get someone to pay a billion dollars for them.

That's pretty clever.

Did the pay for the three engineers, or the thirty million users?

> You are depreciating their work in a way that is not that of a real gentleman.

I do the same exact kind of work. So am I depreciating myself? I may be brilliant and handsome to boot, but I don't think I'm worth 333 million dollars. Which was my point.

Oh sure, I might be worth several mil. I'm that good. But that's still a tiny fraction of what Facebook paid. So no, it wasn't about the brains.

There are stories around of Google spending 5mil or more to acquire (or in some cases, keep) great engineers.

I wonder what the real "market value" for a proven team of 3 great engineers who were the technical base that allowed a company to grow from nothing to $1billion in under 2 years?

It wouldn't surprise me to find those three guys as a team offered 20 or more million if the right company thought they were on the market.

Lars Rasmussen made out like a bandit when he went to FB a few years back, and that was after the "failure" (at least relative to Instagram) of Wave, and before the current "bubble" as well.

IMO, getting bought for $1B is not really the same as "growing to $1B". They may have grown to a ton of users and may have raised some VC money. But that is not the same. Did they even have a revenue stream? People with insane amounts of money overpay for shiny new toys all the time. Have you ever seen MTV Cribs? lol

They have 13 employees of which 3 were heading web ops.

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