It’s been more than five years since Facebook announced one of the most popular and the best business acquisitions in the entire Silicon Valley history. They purchased the photo-sharing app called Instagram for $1 billion. At the time of the purchase, this small app only had 30 million users and zero revenue.
Nowadays, Instagram has over 600 million users, and according to numerous analysts, it will also become a multi-billion-dollar ad business – if it hasn’t become one already. These days, the purchase that Facebook made looks genius, even though it didn’t seem that way back when they made it.
In fact, $1 billion was once considered to be a massive price, especially for a company that wasn’t making any money. It’s still a huge investment even today.
You can see Facebook’s other big company acquisitions and more in the infographic below.
Mike Hoefflinger, former Facebook executive and former director of global business marketing, thinks that there is also another reason why this acquisition was so incredibly valuable. That’s because it showed everyone that Facebook could easily build multiple products at the same time.
It also sent a message to other entrepreneurs that Facebook is the best place in Silicon Valley to drive massive growth. It says that if you’re a builder or an entrepreneur and you’d like to play big truly, you should just go and work with Facebook.
Many analysts also believe that purchasing Instagram is the reason why Facebook ultimately managed to acquire WhatsApp as well, although at the much higher rate. But they were also able to purchase Oculus.
This also helped Zuckerberg, the founder of Facebook, to recruit some big-name executives that can lead units outside of Facebook’s core business. These executives include the former PayPal president David Marcus, now running Messenger; and Yann Lecun, a well-known figure in the artificial intelligence world, now helping to build out Facebook’s AI research division.
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