Here's Why Facebook Bought Instagram

Facebook bought wildly popular photo-sharing app Instagram yesterday for a reported $1 billion. Instagram hasn’t generated any revenue yet, but it is on track to garner more than 50 million users in under two years. Meanwhile, it just boosted its employee count by almost 20 per cent—to 13 total.

As BII analyst Pascal-Emmanuel Gobry argued yesterday, Facebook did not overpay for Instagram. Here are the key takeaways: 

  • Instagram is one of the most capital efficient companies in the world;
  • Photos are one of the core features of social networking;
  • The future of computing, and therefore social networking, is mobile

Click here to read our note on how Instagram is the future of startups →

Click here read our presentation on the future of mobile →

Instagram Employees + Users

Photo: news reports, company releases, BI Intelligence estimates

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