Earlier today, I said on Twitter:
$1 billion for Instagram is giving me serious flashbacks of the months preceding the dot.com meltdown.
— (@R) April 9, 2012
This is what I was referring to:
Mapquest - AOL acquired Mapquest for $1.1B in December of 1999.
GeoCities - acquired by Yahoo! in May 1999 for $3.56 billion
Netscape - acquired by AOL in November 1998 for $4.2 billion.
Broadcast.com - acquired by Yahoo! in July 1999 for $5.7 billion.
Excite - acquired by @Home in January 1999 for $6.7B
Lycos - acquired by Terra Networks for $12.5B in May 2000.
I’m sure Facebook can use the technology and popularity of Instagram to shore up its mobile business. But at a price of $1 billion, I don’t believe it’s worth it. Indeed, I believe it sends a very negative message to would-be investors in Facebook about what they will be doing with the money raised in their upcoming IPO.
There are many people writing why Facebook made a good decision in purchasing a company with a dozen or so employees and no revenues for $1 billion.
I wonder if they’ll be investing their IRA funds in Facebook in a few weeks?
