These four charts prove Facebook’s $1billion acquisition of Instragram was cheap

April 10, 2012

Facebook got Instagram cheap.

Even though the photo-sharing platform has yet to turn a profit, insiders say the $1bn the social network giant Facebook paid for Instagram actually undervalued the company.

The reason? Facebook could be dead without it.

Let’s look at the charts:

Instagram is the most capital-efficient conmpany in the world. Right now, it has 25 million users and just nine employees. (See chart 1 above).

Facebook users spend the most time looking at photos; photos are at the core of the social networking experience and Photos are easily facebook’s most used app.

Put simply: Without photos, Facebook is history.

 

 Mobile is unquestionably the future of computing. (See chart 2 above).

And Facebook has no future unless it is the leading mobile social network. Let’s allow Business Insider to explain precisely why:

“Because photo sharing is the core of social networking, the most popular mobile photo sharing app will become the most popular mobile social network. And because mobile is how we’ll do most of our computing, the most popular mobile social network will become the most popular social network, period.

By 2015, billions of people will be using smartphones. And most of them will be sharing photos.  (See chart 3 above).

 

As a consequence, mobile revenue is set to explode.  (See chart 4 above).

So.

Instagram is the future of mobile social networking, which is also the future of social networking.

Which is worth a billion dollars to Facebook.

 

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Watch as Yahoo’s business goes down the toilet

April 4, 2012

This chart shows the value of Yahoo’s core business. It has been in decline for the last six and a half years.

From a high of £30bn in 2008, Wall Street now values Yahoo at a paltry £2bn.

I used to work for Yahoo Music. I wrote a blog that attracted 3.2m uniques a month. Audience share is not the problem.

Yahoo has had five different CEO’s at the tiller in the last five years. According to a report by activist hedge fund manager Dan Loeb:

“Shareholder value has been destroyed due to poor leadership decisions and failed Board oversight. The Boards that have presided during this period have failed at their most basic mission: to install successful leaders and create a culture of best practices of corporate governance to oversee their initiatives.”

UPDATE: Yahoo are planning massive lay offs tomorrow (Friday is ALWAYS firing day). According to reports, 2000 workers will be axed this week. And that is just the start.

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