Like Facebook itself
tokyogai
4/11/2012 1:13:21 PM
Clearly the way this was valued by facebook must be like they value themselves. Eyeballs are worth more than revenue and the word customer has no meaning. I think Facebook will be proven the be hgihly overvalued if they indeed are valued at $100B. Maybe deals like this will open the eyes of a few of the prospective Facebook investors.
Re: And the beat goes on...
Dex
4/11/2012 12:36:23 PM
You think Jobs might have used a little more discretion. But you're right: the fact that he didn't speaks volumes about how he perceived himself, and his company.
If you read that post Scott mentions, you'll end up shaking your head over the obvious narcissism of Steve Jobs. It notes:
The DOJ pointed to Steve Jobs' biography to argue Apple knew that the scheme would result in higher costs for consumers and would remove pricing competition from Amazon. "We'll go to [an] agency model where you set the price, and we get our 30%, and, yes, the customer pays a little more, but that's what you want anyway," biographer Walter Isaacson quoted Steve Jobs as saying.
I know it's bad form to speak unkindly about the dead, but come on! How arrogant was he to boast about such a scheme?
At what point do companies like Apple, Google and Facebook become monopolies? Can they keep gobbling up the competition without interference by regulators? (If you recall, Microsoft was declared a monopoly more than a decade ago.)
So now think about Apple:"With near-control in spaces like digital players (the iPod), tablets (the iPad), online music (iTunes), and ultrabooks (the Macbook Air), Apple's position as a monopoly based on technological superiority and economies of scale. But majority ownership of a market does not a monopoly make. If it did, many more companies would be investigated for monopoly power at one point or another. What generally leads companies to being accused of being a monopoly is when they act in a way that is hurting their competitors.... and competitors are starting to make the case for abuse of power."
Agree? Disagree? Where are we heading?
What next? Social networking is clearly taking over the Net. I would't be surprised if their next move was to pair with online florist take command of that industry
Re: scratching my head
Tenacious
4/10/2012 9:47:35 PM
I'm sure there was strategy at play, but what kind of precedent does this set? Are we just going to watch companies drop a billion here and a billion there to eliminate the competition? What ever happened to taking them head on, and coming up with something better (at a cost of far less than a billion!!)
Re: scratching my head
driven
4/10/2012 9:25:01 PM
Don't you think by acquiring Instagram Facebook was 1) trying to find a way to capitalize on mobile users (if you recall, it indicated that it makes Nothing from mobile use right now) and 2) circumvent an attack from its biggest potential competitor, Twitter, which has decent photo sharing capabilities? So maybe there was some strategy at play here.
And then there's the old How Long Will They Maintain Instagram as a Stand Alone App? Look at what Apple did to Siri, and what Google did to Picnik. There are always promises, but the pattern seems to be to break those patterns.
@drivewaygirl and @noreen
I'm certain that at the very least, a FB acquisition would reduce Instagram's momentum. It could also result in net shrinkage. A lot of it depends on how Facebook treats the users and what it does to the Instagram privacy policy/Terms of Use. As we know, Facebook has a controversial history in how it treats its users privacy rights.
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