Picture this: it’s 2012, an innocent time when no one had to worry about data scandals and whatnot.

It was during this time that Facebook swooped in to buy a photo-sharing app by the name of Instagram for $1 billion (now R13,5 billion).

It sounded a little exorbitant back then, and some were surprised that Facebook would shell out that much for the app.

Fast-forward six years later, and the social media platform is probably laughing itself silly at the doubters while on the way to bank.

A report by Quartz explains that Instagram is now estimated to be worth – wait for it – an astonishing $100 billion (R1,3 trillion):

It’s a staggering 100-fold return on the original $1 billion purchase, especially considering its next high-profile social media acquisition, WhatsApp, cost Facebook $19 billion [over R257 billion] in 2014.

The new price tag comes from a Bloomberg Intelligence report shared with Quartz. Its author, analyst Jitendra Waral, also estimates that Instagram should reach 2 billion users — catching up to Facebook itself — in the next five years. Instagram recently announced it reached one billion monthly users.

That’s a huge win for Facebook, which lately has been on the receiving end of the Cambridge Analytica scandal, a messy divorce with WhatsApp, and a glitch that resulted in millions of Facebook posts being exposed.

Thanks to this one business-savvy decision, Facebook is set to rake in more dough than ever before:

The financial implications of the acquisition have been huge for Facebook, which has been able to easily replicate the News Feed ad model for the photo app …

Users are spending nearly as much time on Instagram as they are on Facebook. According to a recent report, that’s about 53 minutes per day for Android users. Market analysis firm eMarketer also recently estimated that Instagram now accounts for nearly 30% of Facebook’s net mobile ad revenue, with that share potentially growing to 40% by 2020.

Mark Zuckerberg must be feeling really chuffed about this purchasing decision. It’s probably the best one he’s had in a long time.

As for the original creators of Instagram, don’t worry, they were cool about the whole 2012 buy-out.

Per a Business Insider report, Instagram CEO Kevin Systrom [right] said about his and co-founder Mike Krieger’s [left] decision at the time:

When Mike and I started Instagram nearly two years ago, we set out to change and improve the way the world communicates and shares. We’ve had an amazing time watching Instagram grow into a vibrant community of people from all around the globe …

It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.

Mission accomplished, it looks like.

Also, I’m sure Systrom and Krieger are making a pretty penny from still being in charge of Instagram.

Let’s hope Facebook keeps its momentum going, for its own sake

Trust and believe, if they manage to screw up on this partnership, goodness knows there’s no hope for them.

[sources:quartz&businessinsider]