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If as in the FAQ, that topics about business (computer industry) is allowed here, I'd like to find out why Instagram can be so valuable, that it is acquired for $1 billion dollars (USD). To put it simply, isn't it just a photo enhancement app (such as making a photo vintage look), plus sharing those photos on Facebook? That's because in contrast, PlayFish had superb Facebook games, and many of them, and are so much more sophisticated (such as Restaurant City and Pet Society). And PlayFish was merely acquired for $400 million. Some companies such as RockYou, had the number one app on Facebook, but wasn't even acquired for a low price like $200 million. And now just a photo filter app and sharing photos, and it is a business considered to be worth a billion dollars. Why is that?

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closed as off topic by ChrisF Apr 12 '12 at 20:50

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Perhaps the appeal of Instagram is much wider than that of PlayFish. –  FrustratedWithFormsDesigner Apr 12 '12 at 20:48
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My guess is that in pre-IPO times the reward for a company with a potential of bringing more people to FaceBook far outweighs the reward for a company that serves clients who are on FaceBook already. The 27M users of instagram instantly become counted among the many users of FaceBook! That's how you pump the value of your business to unsuspecting investors :) –  dasblinkenlight Apr 12 '12 at 20:50
    
This isn't really "history" - more current events. –  ChrisF Apr 12 '12 at 20:51
    
Platforms may be worth examining here in the sense of where was Instagram used compared to the games. Perhaps Facebook is wanting better iOS support or mobile developers. –  JB King Apr 12 '12 at 20:57
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The same reason tulips were expensive in Holland in 1637. –  jfrankcarr Apr 13 '12 at 0:23
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1 Answer

You are forgetting about the user base. Instagram has over 27 million users that Facebook wants. Software is worth money, users are worth more. Your other examples are not worth as much because there were many million less users on those services.

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I am sure PlayFish had a lot of users too... RockYou had an app that was called SuperWall, later renamed as "RockYou Live" and had 20 million monthly active users too... –  動靜能量 Apr 12 '12 at 20:51
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All PlayFish users are Facebook users were all Instagram users are not always Facebook users, which is why they are worth so much to Facebook. –  JustinDoesWork Apr 12 '12 at 20:56
    
+1 Facebook valuation is also based on users, so 27M more users will definitely increase is value. This is a pretty good deal for Facebook in fact! (and Instagram owners...) –  user2567 Apr 13 '12 at 7:19
    
Instagram has 27 million users that are not already using Facebook? Can you provide source for that fact? –  seand Apr 14 '12 at 19:59
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