How your ideas make money for Facebook

Facebook is paying US$1 billion for Instagram, CBS News reported. So why is a price tag in the billions placed on the photo sharing service?

Poynter explained that "What separates Instagram from other social networks is that people share photos not just of a thing but of an abstract idea — like 'how I’m watching news of bin Laden’s death' or 'what spring’s arrival looks like to me.'"

So what on earth does an idea cost? Ten of a user's thoughts today are probably worth a penny, an analyst calculated, Bloomberg reported. According to that formula, every "share" on Facebook is worth 2.4 cents.


Meanwhile, a tweet is worth .1 cent, a search on LinkedIn is worth 12.4 cents, a check-in on Foursquare is worth 40 cents and a review on Yelp is worth a whopping $9.13, the analyst found.

Along those same lines, photos must be growing money-makers for Facebook, which recently began placing ads next to images. 


“Video startups have YouTube. Now photo startups have Instagram,” Andres Blank, co-founder of Pixable, told Marshable Business.

In analysing the reason for the purchase, technology blogger Om Malik wrote in his blog that the acquisition is driven by keen market competition: “Facebook is essentially about photos, and Instagram had found and attacked Facebook’s achilles heel — mobile photo sharing.” He supported his idea by giving the evidence of a dropping market valuation of Facebook, from the rumored $500 million to $100 million.

The market value of a top company that is churning out the hardware that enables us to share our ideas, Apple, is going to overtake that of approximately 500 public companies in Spain, Greece and Portugal combined, Bloomberg reported.

Meanwhile, MashableTech reported that this year the forecast of tablets sales (119 million) will double that of last year (60 million), with iPads taking a 61 percent share, at approximately 73 million.

Image: CBSNEWS