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Comment by fallingknife | Hacker News Reader

It was a tiny 1 billion dollar acquisition of a company with less than 50 employees. If everyone knew at the time how dominant Instagram would become, that "everyone" sure didn't include the founders and investors in Instagram.

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Facebook, wary of someone doing to them what they did to MySpace, was going around buying anyone who might be the next thing. It wasn't necessarily clear that Insta would blow up in the way it did but it was clear that was Facebook's motivation for buying.

Also "tiny 1 billion dollar acquisition" is not how I'd characterize what was the largest acquisition FB had made up to that point: https://archive.nytimes.com/dealbook.nytimes.com/2012/04/09/...

> Though Facebook is known for smaller acquisitions, Instagram’s surging momentum likely compelled the social network to swiftly put together a billion-dollar offer.

Mira just raised $2B for her company pre-revenue and pre-product.

Tech valuations were lower across the board in 2012. Meta 15x'd its market cap since then, and Google 10x'd its valuation, despite both companies still holding essentially the same market position today as they did back then. If anything both have a weaker position today than in 2012.

Meta's position is much better, they own Insta and Whatsapp now! Diversification!

Google rise makes less sense but their position as king of search seems even more concrete than ever before (although LLMs might threaten that if they don't stay competitive I guess).

Meta revenue also went up 15x (actually maybe more?). So implying the valuation has not risen

All funding was lower in 2012, across the board. Moreover, inflation hadn’t skyrocketed, valuations weren’t as foamy, etc.

$1B in 2012 is $1.4B in 2025.

Source: https://www.in2013dollars.com/us/inflation/2012?amount=10000...

Purely from inflation, sure. But an $800k seed round was considered large in 2011/2012. I know because I was there.

Now? That would be a small preseed round.

Back in the day, Android allowed any app to see what other apps were installed. That's how Facebook saw the threat from Instagram so early.

https://news.ycombinator.com/item?id=43518866

Some context for those interested:

https://www.techemails.com/p/mark-zuckerberg-instagram-fours...

Actually Instagram was iOS only at the announced time of acquisition. It was a pretty big bet at the time and almost no one believed it was worth $1B.

You know who else knew how many devices Instagram was on? Instagram. And yet they were willing to sell. There is no conspiracy here. There is nothing nefarious. Facebook made a good bet.

Correct me if I'm wrong but as far as I know Facebook (and probably also Instagram) degrades photo quality by a lot, something Flickr doesn't do

That plus scary TOS changes Instagram did immediately after acquisition

There is also the question of cause and effect. Did Instagram grow to what it is today because of a decade of investments from Meta?

Facebook knew. They have the data by spying on everything

They knew photos tracked better in news feeds

Also they new users don’t like to switch and get new followers

See Bluesky now. Hard to move even 1000 followers

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