Instagram’s cost per user

Wed, Apr 18, 2012


With Facebooks’s acquisition of Instagram clocking in at $1 billion, everyone’s asking just what exactly is Facebook getting out of the deal. The answer, in a nutshell, is users, about 35 million and growing to be exact.

Breaking down the purchase price per user, Wired calculates that Facebook is paying Instagram approximately $28 for each new user. It also calculates similar costs across other big name acquisitions in tech and finds that the average cost per user is about $92.

But the cost per employee checks in at about $77 million (13 employees), a pretty astronomical amount rivaled only by Google’s 2006 acquisition of YouTube which had a cost per employee figure of $24 million/each for a staff of 67.

via Wired


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