Facebook buys Instagram for $1 Billion

[Adi]

WTF?

Instagram is worth $1 billion, really?

It was valued at $500 million last month and it took an offer of 1 billion to snatch it away from its owners.

They have 50 million users right now, but are expecting another 50 million now that the service is on Android. 

How the heck can a picture app get 100 million users?  That's insane!  They have $0 revenues by the way, yet Facebook bought them for $1 billion... shocking!

[Patrick Edwards]

Facebook will have enough money, and will put adverts on Instagram to turn it into a profit making thing.

[Adi]

It's not that easy to advertise on Instagram.  While they do have a social network, it's not accessed through the internet much.  It's mainly accessed through the app and people use it mainly to post their pics and that's about it.  There's little room for advertisements on that app.

I think what they might do is add paid services or an advanced app that costs $2.99 or something.  

The main reason they bought them was because of the competition they feared.  100 million users in one place is no joke and it's an obvious threat to Facebook, whether it makes money or not.

I think it's more of a defensive move rather than a move they expect to make profits from.