Instagram signifies a change in direction from Facebook’s previous strategy of buying, at bargain-basement prices, small-staffed companies that are on the “downslide” with smart founders, says Teresa Caro, vice president of social marketing at Engauge, a digital-marketing agency.
After getting location-based service Gowalla and acquiring social-networking patents from Friendster, “Facebook decided to spend a lot more for a stronger mobile presence — and Instagram helps,” Caro says.
Facebook’s Instagram buy could portend a few more deals, such as Google’s pursuit of Pinterest, to acquire eyeballs and data, and Facebook’s possible interest in Path, a popular social network for smartphone users, she says.
But the staggering price paid for 11-person start-up Instagram has some murmuring about another Internet bubble. Version 2.0, anyone?
“Unreasonable salaries. Unreasonable amounts paid for companies. Lack of resources,” Caro says. “It’s all so unrealistic, and it feels like a do-over for me.”