The buzz this week is Instagram’s $1 Billion valuation by Facebook, which is of course valued in the … well, uber-billions, I guess. And all on the fairly simple premise that people are using these services, and will continue to use them, which then provides a basis for advertising, which then provides the revenue, which then supports the valuation.
Now, call me crazy, or cynical or even septuagenarian …but does anyone remember Kozmo.com? Webvan.com? Pets.com and the sock puppets? Valuations not in the billions, but solidly in the hundreds of millions. All of which fell to earth like Icarus. Because nobody used them.
Now fast forward from 1999 to today, maybe even this week: if enough users decide that Instagram is no longer cool, maybe just because Facebook acquired them and hopes to make them yet another way to suck up your personal data, what happens to Instagram’s valuation? Does anyone really think that Facebook is immune to becoming, well, not the place to go anymore? Remember MySpace, which stopped being the social place to go, for no other reason than that nobody went there anymore?
The technology world is nothing but fickle and fast, and memories are almost always short.
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