Instagram sold for a millions billion. Crazy and scary! I am always skeptical of figures like a million, 100 million, billion or something like 10%, 10 times.. round figures as we generally call them; most of the times these are numbers that are just pulled out of thin air. It says to me that there was not a moment of thought given to the actual process of valuations of the entity in question.

Here is my thought of how this deal may have come about

In late 2010 after launching instagram
Instagram founder 1: Dude, this app is getting famous
Instagram founder 2: Ya man. Wouldn’t it be cool if we could actually sell it to the big guys
Instagram founder 1: Sell this … ya right .. maybe some day some idiot will offer us a billion for it
Instagram founder 2: billion, get real dude…

Mark Zuckerberg on 3 Apr when Instagram was launched: Let me check out this Instagram thing on my Android
Mark Zuckerberg: WTH! it’s only a single picture surrounded by all empty space. And 30 odd million people using it. I can damn well put my Facebook ads in here… Those Instagram guys are dumb…

Mark Zuckerberg to instagram founders: Guys I wanna put my ads on your App. Will you sell?
Instagram founder 1: Noway dude, not for a billion bucks!
Mark Zuckerberg: I will give you a billion bucks
Instagram founder 1: Are you serious?
Mark Zuckerberg: Ya, its not like the billion is from my pocket. Some stupid investor will pay for it
Instagram founders: Cool, it’s a deal!!!

What bothers me is not that Facebook bought Instagram, but how people like Mark Zuckerberg value businesses. I know of companies who work their asses to generate revenues, growth, profits, and then there are people like Zuckerberg who BTW in a few months head a 100 billion dollar company, throw fancy figures of money that they don’t even have at things just because they don’t know how to deal with business ideas. It’s like if you can’t beat it, just buy it.

Cleary, people who are going to invest in Facebook and the likes, must carefully reason out their investment in tech companies especially the social kinds who are yet to generate serious dollars.

Also, with the buyout, Instagram – not so cool anymore, atleast for me…