551-day-old Instagram: The Billion Dollar iPhone App
The New York Times Company is easily one of the most well known American media companies in the world. The first issue of the 'New York Daily Times' was published on September 18, 1851. A little name change to The New York Times in 1857, and well... the rest is history.
Today the New York Times publishes two national and sixteen regional newspapers. They own eight television stations, a couple NY radio stations, not to mention a varied collection of 40+ websites. With international recognition, and more than 100 years of history, the Times' worth comes in at a respectable, though likely unsurprising, $967 million USD.
And yet, the NYTimes is a steal when compared to a little San Francisco-based startup company...
Instagram, Inc. launched the popular iPhone photo-sharing app, Instagram, in October, 2010. It quickly rose to become a must-have app for any iPhone user, and it wasn't long before social media sites were dominated with tweets, inviting some 500+ followers to check out the low-fi filter photos, complete with instagr.am/ link. The April 3 launch of the first Android-based version, added a million users. Did I mention that was all within a whopping 12 hours?
Despite its popularity, app certainly has its critics. Many of the complaints are even valid. In a recent Facebook poll, many users found the Instagram photos in their feed to be annoying, second only to baby/kid photos. Gimmicky, poor photography effects, cookie cutter filters, unimaginative shots... the complaints are many.
And despite its detractors, the little, San Francisco startup which employs just thirteen people, sold to Facebook.
The price? 1 billion USD.
I'll say it for everyone who isn't currently reading this from a certain South Park Street address: yes, we're all in the wrong line of work. With that out of the way, the other question on the minds of many is most likely, 'What in the world could possibly make this app worth a billion bucks?'
The fact of the matter is that Facebook has always been the world's largest photo-sharing service. Despite Flicker and other photo sharing sites being stronger in ore ways than one, they lack the key element of providing a social channel. Where Facebook pales in comparison, however, is that well... they can't build a photo sharing smartphone app to save their lives.
Successful? Check. Proven ability to attract users in a short amount of time? Check. A product users already know and use? Check. Time saved on attempted development and marketing of a unique photo platform? Priceless.
Only time will tell if Instagram will be worth the billion dollar investment, but if Instagram's past 17 months of success are any indication, Facebook's potential gain is foreseeably going to be significant.