I think he's talking about the mobile space specifically..

And to go further: I have a Flickr account, I have some Picasa galleries.. I rarely visit those sites except to upload a batch and then go elsewhere.

I use Instagram 5-10 times daily when in transit, on lunch, while watching TV, etc...

It's probably too late, but if Facebook would like to hedge their bets by seeing if they could make an Instagram workalike & user traction for much much less than $1B -- for say, oh, a mere $1M up front and $9M upon delivery -- I'd be willing to take a shot. One man team. Give me say 2 months absolute tops. I deliver the mobile app, website, backend. Facebook brings the massive user base. Oh wait, again, they could already do this, without needing me. Or Instagram. So, put me down as another guy who thinks it's a misspend on Facebook's part, partly due to perhaps being drunk on their own "funny money" valuations.

But then Instagram would still exist as an alternative social network for sharing photo's, outside of Facebook's control.

The assertion is that, for a billion dollars, Facebook should be able to create a significantly better app and market it better (or 'at all') than Instagram do.

Facebook have got 721m users and all the data they need to constitute incredible market research. In twelve months if Facebook couldn't build an app which is competitive to Instagram, and get it installed with ~5.5% of their user-base, I'd be really fucking worried.

Also consider this: Twitter add "Photos" to their filtering options adjacent to "Connect" and "Discover". So you can just click a Photo button and see all your connections' photographs in a stream. Oops, they just went halfway towards creating most people's Instagram experience.

you nailed it

Thanks. Incidentally your startup is in a spookily similar field to mine. Email me? mistergeorgespencer at google's email solution dot com.

sbarre has it right. You missed this part: "Instagram is the main mobile photo app."

Damn reading comprehension. ;)

To go a step further, consider: Flickr is available on every device (computer or phone) with an internet connection . Instagram was iOS-exclusive until a week or two ago, and yet it managed to reach sixty percent of Flickr's user base size. That's astounding.

I was addressing the part where it said "it's the photo app". It isn't "the" photo app. You can make the case that it's the most widely used mobile photo app after Facebook. But that != $1bn valuation or YouTube-like status.