When Facebook acquired Instagram in the spring of 2012, the photo-sharing app had roughly 50 million users and wasn’t making any money. The fact that Mark Zuckerberg decided to shell out $1 billion for the rising competitor anyway was greeted with skepticism by some, while others considered it a smart move to step in before Instagram really took off. In hindsight, the latter was right as the chart below illustrates.
The photo-sharing app now has 1 billion monthly active users, its advertising business hit the ground running and Instagram Stories has become Facebook’s first line of defense against Snapchat. One can only imagine how much Instagram would be worth today, but considering that Snapchat’s parent company Snap is valued at more than $16 billion with a fraction of Instagram’s users, it seems fair to say that Instagram’s acquisition price was a billion well spent.
