Tuesday, April 17th, 2012
I’ve $30 on my mind. $28.57 to be exact. This is the per user price that Facebook paid for Instagram last week based on Facebook’s $1B offer and Instagram’s 35M users. In my favorite article about the acquisition Andy Baio of Wired (my ten year-old self hopes he’s related to Scott Baio) breaks down the cost per user of thirty notable internet acquisitions over the last ten years.
His conclusion: Instagram was a good deal. And not indicative of a bubble. See his analysis here.
Three reasons why this is awesome:
1. Cold hard facts. Baio uses a cost per acquisition model to which any marketer can relate. It makes $1B tangible. eBay paid $84.42 per PayPal user. Yahoo $111.11 per Flickr user. Google $48.53 per YouTube user. Intuit $113.33 per Mint.com user. At $28.57 per Instagram user, Facebook is looking rather savvy.
If the relative data cohort was how much it costs to feed hungry children or how far to the moon Kevin Systrom’s 400M new $1 bills would reach, we’d be telling a different story. This is what I love about data – it holds rich stories.
2. $30 can get you a lot of different things. Some ways to spend $30:
15. Fifteen days of access to a San Francisco gym
14. 3.75 months of NetFlix (streaming)
13. Five round-trips over the Golden Gate bridge (cash not FastTrak)
12. Thirty $1 tips to buskers on the L subway platform in NYC
11. 37.5 clicks on a Facebook ad (based on average CPC of $.8)
10. Ten minutes of a therapy session
9. Two mixed drinks in a swanky Manhattan bar
8. Thirty songs on iTunes (more…)