Instagram wasn't "worth $1B". It was worth $1B to Facebook (and even more to Twitter, apparently).
It has to be viewed in that context. A context in which Facebook was botching mobile major time and described it as its major challenge in public filings.
> Instagram wasn't "worth $1B". It was worth $1B to Facebook
Which, (given a fixed supply of exactly 1 Instgram) means that it was worth $1B.
Whether Facebook overpaid (ie, whether they would have been better off spending part or all of that $1B elsewhere) is a completely separate question - the point is, the market valued Instagram at $1B.
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It's surprising that Instagam would be considered a billion dollar business, but Reddit a 400 million dollar business.
Instagram wasn't "worth $1B". It was worth $1B to Facebook (and even more to Twitter, apparently).
It has to be viewed in that context. A context in which Facebook was botching mobile major time and described it as its major challenge in public filings.
> Instagram wasn't "worth $1B". It was worth $1B to Facebook
Which, (given a fixed supply of exactly 1 Instgram) means that it was worth $1B.
Whether Facebook overpaid (ie, whether they would have been better off spending part or all of that $1B elsewhere) is a completely separate question - the point is, the market valued Instagram at $1B.