This will make you think: at its current, public market valuation, the New York Times company is worth about $50 million less than the $1 billion dollars that Facebook just paid for Instagram.
Yes, the New York Times is an organization in transition. Yes, newspapers are struggling. Yes, digital monetization is a work in progress. And yet, the New York Times is a truly global brand, and has proven its longevity, even if it is in choppy waters at the current moment.
Instagram is a dozen people and a hot mobile app that exploded to the head of its market with some well-timed juice from Apple. It’s meteoric rise is nothing short of spectacular. And its falling under the Facebook aegis is a rather stunning end to its independent life.
However, it’s easy to lose a sense of scale. The actual number one app’s parent company, OMGPOP, sold for a mere $180 million. It had revenues. Facebook paid more than 5X for Instagram, a service that was only perhaps as successful as OMGPOP in terms of total user scale.
It’s hard to find a mathematics in which Instagram worth $1 billion in cash, but in pre-IPO stock, Facebook could stomach the hit. Interesting to note that they could have bought the New York Times, and used the spare to fund Instagram’s entire last round. The sums we are discussing here are fantastical.
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Hat tip to @Jason_Rowley for sending this in.
See also: Could Instagram Have Become a Successful, Independent Business?
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