The Value of Human Capital in the Social Network

Facebook just acquired Instagram for a whopping $1 billion. Why? And what does this mean? My two cents.

Almost everyone agrees that FB didn’t do this for Instagram’s technology; its just not that innovative. Most people think that the key motivation was mobility; FB isn’t doing so well in that space and Instagram will give them a platform in the mobile world.

I don’t think FB bought the technology or the mobile platform; I think they bought you.

And the price tells us a bit about how much you are worth. Instagram has ~30 million users. If you are an Instagram user that makes you worth $33.33. Humph.

You are the prize in this transaction because you are the source of the content FB will now monetize. Happy?

…Mike