Eric Siu breaks down Facebook's 2012 Instagram acquisition, which everyone thought was a massive overpay at $1 billion. Twelve years later, Instagram generates $32.4 billion in annual revenue and has become more valuable than YouTube.
Remember the Instagram acquisition from back then when everyone was like, oh my God, Mark Zuckerberg overpaid because he paid $1 billion for Instagram? It took 6 years for Instagram to go from universally mocked as a waste of money to doing $11.3 billion a year in revenue and growing at almost 50% a year. It's even higher than that now. 2021 was $32.4 billion. Just so everyone knows, that's actually more than YouTube. Sometimes these acquisitions take a long time to realize. And also people were discounting Zuck and saying, oh, he doesn't know how to build products anymore. But you look at all the things that they shipped and all the things that they added to Instagram. It's gotten a lot better, and they figured out how to make it work.
