When it was announced that Facebook would be acquiring Instagram back on Monday, the web balked at the $1 billion price tag and started shouting “bubble”. Is it really indicative of another tech bubble, or was it a smart move on Zuckerberg’s part? Andy Baio — the founder of Upcoming.org, which was purchased by Yahoo — has written up an interesting article over at Wired that takes a look at the numbers. For a billion bucks, Facebook snagged a startup with a whopping 35 million users and just 13 employees. This means that Instagram had a relatively cheap cost-per-user price and a ridiculously high cost-per-employee price.
Instagram?s Buyout: No Bubble to See Here [Wired]