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.

 

Posted in: Infographic of the day, News