Meta Instagram
Zuckerberg paid $1B for an app Facebook could have copied because teenage girls
In 2012, Instagram was two years old, 30 million users profitable on minimal revenue. Mark Zuckerberg paid $1 billion, the price was outrageous. Facebook was 200 times larger, analysts called it a waste. Conventional analysis, Instagram was a photography app, Facebook had photo sharing, why by competition, why not copy features? Zuckerberg understood the deeper calculation. Instagram was winning the demographic that mattered most, teenage girls. On Facebook, girls watched parents. On Instagram, they created. Instagram's engagement per user was three times higher. Retention showed no decline. Girls aged 13 to 22 lived on Instagram. The hidden calculation was attention arbitrage. Teenage girls' attention was migrating.
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