Facebook paid $1 billion for Instagram in part because of the opportunity cost Facebook faced by not getting the page views from engagement stemming from photos posted to Instagram that wouldn't have been seen on Facebook. When you consider how much engagement Facebook could have potentially missed out on, $1 billion doesn't seem so irrational, even though Instagram had to yet to monetize the service themselves.
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Facebook paid $1 billion for Instagram in part because of the opportunity cost Facebook faced by not getting the page views from engagement stemming from photos posted to Instagram that wouldn't have been seen on Facebook. When you consider how much engagement Facebook could have potentially missed out on, $1 billion doesn't seem so irrational, even though Instagram had to yet to monetize the service themselves.