It's funny to think back to when Facebook's (NASDAQ:FB) 2012 buyout of photo sharing app Instagram shocked the investing world with its $715 million price tag.
Today, in light of Facebook's recent agreement to buy messaging start-up WhatsApp for a jaw dropping $19 billion, Facebook's Instagram buyout looks like chump change. However, one recent positive move at Instagram might also serve as a broader example of the merits to Facebook's M&A strategy then and now.
Monetization mania at Instagram
Facebook's management, especially founder and CEO Mark Zuckerberg, historically have had a slightly begrudging attitude toward monetization, which makes the ultimate return on its billion-dollar buyouts all the more unclear.
However, slowly but surely, Instagram appears to be making meaningful progress on toward raking in the big bucks as well. It recently signed a deal with global advertising powerhouse Omnicom that's worth $100 million over the next year. More broadly, this appears to be part of a broader, intelligent push to create shareholder value at Instagram as well.
In the following video, tech and telecom analyst Andrew Tonner looks at the Instagram news and the implications it could hold for Facebook investors more broadly.