10 Apr, 2012, 03:26 ET
NEW YORK, April 10, 2012 /PRNewswire/ -- Investor Uprising, the individual investor's no-nonsense resource for global business trends and investment ideas, has weighed in on the Facebook-Instagram deal.
Facebook announced Monday that it was buying photo-sharing application Instagram for $1 billion in a mix of cash and stock. Investor Uprising Editor in Chief R. Scott Raynovich says the sky-high valuation for the two-year old company will pose risks to large public Internet companies such as Google (Nasdaq: GOOG) and Facebook, which are increasingly competing with faster startups and must now pay to acquire more of them.
"You mean to tell me that you are the most powerful social-networking company in the world, and you can't come up with a better photo-sharing app than 12 hackers in pajamas?" wrote Raynovich in his regular IU blog. "If a garage full of coders can beat Facebook with a photo-sharing app in two years, does that mean there might be more risk in the social-networking market than people think? Yes."
The blog points out that Facebook is spending $1 billion to defend itself against a tiny startup, and that odds are companies such as Google and Zynga (Nasdaq: ZNGA) may follow the trend of spending huge sums to scoop up startups offering innovative features.
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About Investor Uprising
Investor Uprising is the individual investor's no-nonsense community for accessing business trends and investment strategies. Combining expert market commentary, fundamental analysis, and on-the-ground reporting, Investor Uprising helps the reader find the best investment opportunities in global markets. Sponsored by PR Newswire and operated by UBM plc, Investor Uprising's community of contributors reaches millions of potential business readers around the world.
R. Scott Raynovich
Editor in Chief, Investor Uprising
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Community Editor, Investor Uprising
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