Facebook bought Instagram for $1 billion before it had a business model
Evidence
In April 2012, a mere eighteen months after its debut, Instagram was purchased by Facebook for $1 billion. The high-flying start-up’s founders had cashed out without ever having devised a business model. No matter: by November the following year, the first ad feed would run in Instagram, following Facebook principles of limited targeting. The acquisition would prove astute. In April 2012 Instagram had 30 million users, but by the fall of 2015 it had 400 million, more than Twitter. — Tim Wu, The Attention Merchants, 1061
Categorization
- ADDENDUM: Supports the attention-platform history thread—the acquisition shows how platforms acquire reach first and monetize via ads later, a pattern relevant to the reader’s attention-industry research.
- XREF: connects to: Instagram reached 30 million users within eighteen months of launch; Instagram converted self-expression into an influencer advertising engine