Social Media giant, Facebook announced that it will buy Instagram for a billion dollars.Instagram is the new hip photo sharing app that has taken the mobile web markets by storm. Instagram now has over 30 million users.
"On Tuesday, a message from the Instagram Twitter account said that the app had hit the #1 spot on Apple’s App Store for the first time ever. And in the week since it hit Google’s app marketplace, the Android version of Instagram has logged an impressive 5 million downloads."
According to an article written by Hayley Tsukayama for The Washington Post. The importance of this purchase is highly debateable. Some think Facebook made this purchase to prevent Apple from buying instagram. Others believe Zuckerberg made the puirchase to acquire the 30 million users.
To others, it's the biggest sign yet of a growing Web bubble. If this is true it will mark the second major internet bubble.
The first was the dot-com bubble, also referred to as the Internet bubble and the Information Technology Bubble was a speculative bubble covering roughly 1995–2000. The period was marked by the founding (and, in many cases, spectacular failure) of a group of new Internet-based companies commonly referred to as dot-coms. Companies were seeing their stock prices shoot up if they simply added an "e-" prefix to their name and/or a ".com" to the end, which one author called "prefix investing". A combination of rapidly increasing stock prices, market confidence that the companies would turn future profits, individual speculation in stocks, and widely available venture capital created an environment in which many investors were willing to overlook traditional metrics such as P/E ratio in favor of confidence in technological advancements. The collapse of the bubble took place during 2000-2001.
It's about time this web bubble bursts. Nothing that springs up overnight has any real value.
but "Facebook doesn't need users, community, or a startup that's not yet profitable, no matter how hip it is," says Molly Wood in her blog for CNET News. According to Ms. Wood Facebook already has atleast "850 million" users of it's own. So Facebook is certainly not hurting to gain new users. It is believed that at this point Facebook's growth potential is slowing, however it is expected that Facebook will gain another 100 million users globally in the near future.