Zuckerberg Made Instagram Deal Alone

benfrog writes "According to the Wall Street Journal, Facebook's Board of Directors was all but out of the picture when Mark Zuckerberg struck the $1 billion deal to purchase Instagram, the yet-profitless photo-sharing service. From the article: 'It was a remarkably speedy three-day path to a deal for Facebook—a young company taking pains to portray itself as blue-chip ahead of its initial public offering of stock in a few weeks that could value it at up to $100 billion. Companies generally prefer to bring in ranks of lawyers and bankers to scrutinize a deal before proceeding, a process that can eat up days or weeks. Mr. Zuckerberg ditched all that. By the time Facebook's board was brought in, the deal was all but done. The board, according to one person familiar with the matter, 'Was told, not consulted.'"

Was told, not consulted.

[HermDog]

Pretty much how we all got Timeline.

I'm confused

[sir_eccles]

Why did it take 3 days for the other guys to say yes to $1bn?

Re:I'm confused

[jjohnson]

Because the minute someone offers you $1b, you think you're worth 1.1.

He only bought instagram to troll

[Cito]

Since the Winklevoss twins were interested in purchasing it first. Zuckerberg swooped in and bought it solo with the quickness before the Winklevoss' knew what hit them...

It's all setup for The Social Network Part 2 :P

Re:I'm confused

[canajin56]

Seems like they had a $1 billion business model! ;)

Re:I'm confused

[larry bagina]

They had a business model: sell out for $1 billion.

Re:Was told, not consulted.

[drpimp]

Dude this is /. we all know you only have like 4 friends ... not really a good sample size.

Standing in awe

[caffemacchiavelli]

While I'm still unsure how they got their investors to accept a $500M valuation (Series B, was it?), going into a meeting thinking "Yeah, $2B for a popular photo sharing app platform sounds about right" must take some cojones. I probably couldn't sell Instagram for $200M, I wouldn't even know where to start.
"So, we have this platform and our users are totally committed to the experience and not just using it because it's hip...and we all know that social media startups tend to stay popular and don't crash after a year or two...and crap, we can totally monetize that thing, like print photos on mugs and stuff...that's like an instant $80M/year right there, minus the cost of the mugs, of course. So, whaddaya say, two billion?"

Re:and this is how...

[khendron]

No no no! A cloud bubble DOUBLE rainbow!

Re:paid for user data

[hal2814]

Well, that depends on your definition of "scam." They do have to follow the law. As long as they wrote out the actual details of their scam and put it somewhere on display like in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying 'Beware of the Leopard' then they're fine. If they don't do that legal legwork, they could get into trouble.

Instagram's Kevin Systrom's Reaction

[bhlowe]

Kevin Systrom recently sold Instagram to Facebook for a billion dollars and this is how he feels about the sale:

Here is what he had to say about it. [youtube.com] .