For How Much? Facebook Buys Instagram

The social media game just raised the stakes once again.

Facebook announced Monday that it’s getting ready to buy-out the photo sharing app “Instagram”

Get the details on dollars involved- and WHO stands to score the MOST.

Instagram has only been around since March of 2010 and has already made such an impact on sharing photos with its social media app, that they have accepted an offer from Facebook for buy-out.

ONE BILLION DOLLARS.

I wish I knew how these numbers are calculated- $1 billion dollars?  Who’s sitting around the table and estimating how much another company is worth- then adding another gob of money on TOP of that so that the company HAS to say yes and NO OTHER company wants to up the price.

Business Week has a little insight on the money:

Investors, meanwhile, have been lining up to get in the door. That culminated last week in a $60 million financing round, led by Sequoia Capital, which valued the company at $500 million, according to people with knowledge of the funding.

That means Systrom built Instagram’s valuation from zero to $500 million in two years, then doubled it to $1 billion in a week.

Over 30 million people have the Instagram app on their iOS phone (iPhones).  Just last week, Instagram released a versioin for Google’s Android phones and the free app was downloaded by 1 million people within 12 hours of it’s release.

Those are HUGE numbers.  It takes a HUGE brain to come up with the science and business skills behind that kind of success.

Meet Kevin Systrom- A Stanford grad and former Google employee who never doubted that he and co-founder Mike Krieger would take Instagram to this kind of success. The company only had 4 employees last year; currently they have a whopping 13 employees.

Kevin Systrom (27) stands to profit about $400 million on the Facebook purchase.  All the other employees will also get a share of the $1B deal.

Crazy. Crazy. Crazy.

I think there are a couple of things to take away from this deal:

1) SOMEBODY is making money off of each FREE app.

2) STAY IN SCHOOL.