Mr. Zuckerberg, Facebook’s co-founder and CEO paid a little more than $1-billion (U.S.) in cash and shares to buy a startup firm called Instagram, maker of a photo app., a company with 12 employees, practically no assets, no revenues.
Since that deal was announced – it was accepted but hasn’t closed – Facebook has developed its own similar app, which will compete with Instagram.
Facebook wasn’t acquiring Instagram as an investment. (If it were, it wouldn’t have developed its own version.) Facebook was eliminating a threat, at a very high cost.
...By his actions, Mr. Zuckerberg is admitting that there are few barriers to entry in the social networking business.
No comments:
Post a Comment