Facebook's $1bn (£630m) cash and stocks purchase of mobile photo-sharing app Instagram ushers in an X-Factor culture of instant fame for bright ideas.
Like the X-Factor itself, the deal distorts the wider market around it and creates a culture where big money anoints the chosen for their moment in the spotlight.
Instagram and other smart, intuitive apps like it are ideas that have millions of fans – people for whom the 19th century idea of taking a photo and showing it to someone is part divine revelation, and part lifestyle statement. As yet, however, Instagram itself has little in the way of meaningful revenues, and no immediate means of turning popularity into income, let alone profit.
As The Huffington Post said on 10 April, the deal values the app more highly than the New York Times. More important, it also puts it on a par financially with another recent billion-dollar deal: Microsoft's $1.1bn acquisition of 800 AOL patents that underlie key aspects of online business.
Such is the momentum behind the mobile apps landgrab, a simple, free app such as Instagram can receive a valuation that is the same as 800 tried and tested patents that underscore ebusiness.
Other mobile apps that allow users to draw simple objects or perform tasks that, on a sheet of paper, could be carried out with ease by a five-year-old are also worth millions of dollars, and reinforce the impression of technology being infantilised.
But as with the dotcom boom before it, that is to miss the point: any technology that is as easy to use as a sheet of paper or a sketchpad is valuable, and IT strategists should learn from the conspicuous success of technologies that are instantly accessible and understandable by large numbers of people.
A popular technology is, more often than not, one that is well designed – or, at least, one that allows people to do something creative quickly. Alas, this is something that Facebook itself seems to have forgotten, with its relentless determination to clutter up its own interface and user experience in a way that Google and Apple understand should never be done.
Facebook, then, has much to prove with its hard-won purchasing clout. On the face of it, however, it has just spent $1bn acquiring a profitless, revenue-light startup that built and launched an app in just eight weeks – albeit one with an impressive 30 million users and counting.
Instagram was backed with venture and seed capital to the tune of about $7.5m. A year ago, funding from Benchmark Capital valued the company at just $25m. Its most recent valuation was £500m, so Facebook has voluntarily paid double the odds.
It must see a future for the app that follows a similar trajectory to Facebook's own - which may mean losing sight of the simplicity and the friendly interface that have driven its popularity.
When Google purchased YouTube many questioned the sums involved. But that was an acquisition that made good business sense: YouTube is a platform as well as a vibrant community. Instagram's achievement may be stunning in business terms - and good news for its investors - but Facebook would be hard pushed to claim it has bought itself a comparable technology platform.
Instagram appears (on the face of it) to be built from, and powered by, the smart use of off-the-shelf items, all underpinned – like so many startups these days – by Amazon's infrastructure and services. This is not to underestimate the achievement of the app's designers – quite the opposite, in fact. Clever Instagram.
So Facebook has essentially spent $1bn to acquire 30 million users of an app that, Mark Zuckerberg says, the company wants to preserve rather than fully integrate with the Facebook platform. In effect, this values each user at $33 (£21).
The sums of money at stake create a financial gravity around which the wider technology investment market must now bend. This, perhaps, is the real point of the deal: pre-IPO, Facebook has spent a billion dollars to tell people it can spend a billion dollars. Now all it needs to do is find a way to make $33 back from each of 30 million people.
It is possible that Zuckerberg sees Instagram as a Trojan horse - in the original sense - for Facebook to enter China, where the app is not currently blocked by the Chinese authorities..
Instagram-style images can evoke memories of times past, and today's purchase certainly evokes some for seasoned technology watchers: memories of the dotcom boom, where many a good idea was massively overvalued, and some valueless stocks changed hands instead of cash. It was also an era where well-connected venture capitalists could play both poacher and gamekeeper with their investments.
Some of those ventures, of course, went on to be massively successful. But the superheated financial climate that the dotcom boom created was one reason for the bust that followed.
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A discussion of the "risk perception gap", its implications and how it can be closed