Twelve years ago today, social media company Facebook, which is now known as Meta Platforms Inc META announced a $1 billion acquisition of mobile photo-sharing app Instagram.
The acquisition happened shortly before the company's IPO and was criticized due to its massive price tag for a small company. Among those who poked fun were talk show host Jon Stewart.
What Happened: Meta Platforms ended the fourth quarter with 3.19 billion daily active users and 3.98 billion monthly active users, which includes several of its platforms such as Facebook and Instagram.
Years prior, a $1 billion deal to acquire Instagram was considered a big risk. The mobile photo-sharing app had 27 million users on iOS and had just launched on Android, gaining one million users in 24 hours. While the platform had seen initial success, it also was questioned over the potential for monetization and how it would stand out against the competition.
A clip from an April 2012 "The Daily Show" with Jon Stewart episode is being shared on social media 12 years later, with the host criticizing the acquisition.
The clip includes showing a Fox Business news story of the acquisition.
"Oh my god that is unbelievable, what is Instagram," Stewart asks before playing another clip.
The clip shows how Instagram works, how users can edit photos and even take new ones with the app.
"Wow, that's really lame," Stewart adds. "Why is this news?"
The news clip goes on to share that the purchase price is $1 billion.
"A billion dollars of money? For a thing that kinda ruins your pictures," Stewart asks. "The only Instagram worth a billion dollars would be an app that instantly gets you a gram."
Why It's Important: The clip made a reappearance as Stewart recently interviewed Federal Trade Commission Chair Lina Khan. Stewart revealed he was told not to interview Khan when he had his "The Problem with Jon Stewart" show on AppleTV+.
One of the topics Stewart asked Khan about was how big technologies were allowed to grow to the size they are today, which is now bringing on conversations about anti-competitive behavior and whether breaking them up is needed.
"2024: Jon Stewart asks head of FTC how BigTech was allowed to get so big, 2012: Jon Stewart laughs at Facebook for buying ‘lame' app called Instagram," X account PressimistsArchive shared with the video clip.
Facebook paid $1 billion for the photo-sharing company, which came after Twitter offered a reported $500 million and the company had raised money at a $500 million valuation.
The deal was widely seen as risky given its high dollar value, coming ahead of Facebook's IPO and the risk of monetization. The acquisition also marked a large one by size for Facebook, which had been buying other companies at less than $100 million as it grew.
"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," Meta CEO Mark Zuckerberg said at the time.
Today, Instagram has billions of monthly active users and is one of the key components of Meta Platforms. The photo-sharing app has grown into video and was monetized by Meta with advertising and partnerships.
Years after the acquisition, Facebook's deal to buy Instagram was recognized as one of the greatest deals in recent history by publications like TIME and is considered one of the best technology-related acquisitions of all time.
The deal added hundreds of billions of dollars to Meta Platforms valuation over time and helped the company soar to a valuation of more than $1 trillion today.
While Stewart openly mocked the deal, Facebook likely had the last laugh for buying the "lame" app that "kinda ruins your pictures."
Photos: Shutterstock
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