Does $1 Billion Instagram Purchase Prove Social Media Bubble?
Facebook has just spent a lot of money to purchase a photo sharing app that costs zero dollars to use and has no source of revenue. That sounds to us a lot like a bubble market.
What's the Latest Development?
Facebook has just spent an awful lot of money to buy Instagram, a photo sharing app which costs nothing to use and has no revenue source. To some, it confirms the recent mumbling over a possible social media bubble. "There's widespread agreement that bubbles occur when a speculative mania causes the price of an asset to soar far above its intrinsic worth," wrote the New York Times' James Stewart last July, referring to LinkedIn's possible over-valuation. For social media companies, value usually comes from advertising revenue or selling a product to the public. Facebook advertises, for example, and Zynga sells games.
What's the Big Idea?
Instagram does not really have a business model at all. But for Facebook, the photo app's value likely comes from its popularity, which went from 5 to 30 million users in the last 10 months. Some tech analysts say that Facebook, which already has integration with Instagram, has just bought the competition. As for a new tech bubble, the fact that we are even talking about one may mean there is no bubble. 'A key characteristic of a bubble is that no one thinks it's a bubble. If everybody's upset, it's a good sign,' said Netscape founder Marc Andreesen.
Photo credit: shutterstock.com
Giving our solar system a "slap in the face."
- A stream of galactic debris is hurtling at us, pulling dark matter along with it
- It's traveling so quickly it's been described as a hurricane of dark matter
- Scientists are excited to set their particle detectors at the onslffaught
The climate change we're witnessing is more dramatic than we might think.
A lazy buzz phrase – 'Is this the new normal?' – has been doing the rounds as extreme climate events have been piling up over the past year. To which the riposte should be: it's worse than that – we're on the road to even more frequent, more extreme events than we saw this year.
Once again, our circadian rhythm points the way.
- Seven individuals were locked inside a windowless, internetless room for 37 days.
- While at rest, they burned 130 more calories at 5 p.m. than at 5 a.m.
- Morning time again shown not to be the best time to eat.
SMARTER FASTER trademarks owned by The Big Think, Inc. All rights reserved.