Why Facebook is Stupid & Tracebook Will Crash Because It Bought Instacrap
Overvalued companies tend to buy overvalued companies. Read on to see how Facebook made the dumbest purchase in history. Not because of the value of the company but the legal repercussions that will come with the way they mistreat the 35 Million registered customers of Instagram who were all already Facebook users before the acquisition.
A Billion Dollars
Imagine a company with 13 employees and zero revenues and millions in debt. Facebook just put up one billion dollars for Instagram a two-year-old photo-sharing website. You can see how stupid the company is yourself by downloading the app at their site: http://instagr.am
The idea behind the purchase is not that the application can make money under the current company structure or any structure but rather a way to violate the privacy of the 35 million Facebook users who are verified Instagram users. Any other claim by Facebook in the reasoning of the purchase would be fraud.
In 2010 Instagram's name was then "Burbn" They borrowed US$500,000 to get started. The second loan came a year later, this time for US$7 million. Friends of Mark Z are rumored to be among the venture capitalists. At that time, Instagram had attracted (according to their own self regulated accounting practices) almost 2 million users since their start. Third loan came from again venture capitalists who are rumored to rub elbows (and maybe more) with Mark Z: a $50 million deal hours before the Facebook/Tracebook acquisition. With a purported 30 million IPhone users and about 5 million Android users Facebook justifies the acquisition. Because the company was considered private equity, insider trading criminal charges will not proceed with any Facebook employees or Instagram investors but civil suits should be a slam dunk.
What Really Happened: Facebook created Instagram then bought it back.
In short Facebook/Tracebook paid a Billion to pay off Instagram investors in a big way because they are going to need the vast majority of those funds for legal fees and to settle when Instagram users sue the hell out of them in civil courts around the world. Discount Facebook advertising helped to spread the Instagram App to the 35 Million users in the first place. Rumor has it that they targeted unverified users or Facebook accounts that were already suspect in being a spam, alias or fake Facebook users.
Facebook is desperately trying to convert users to verified users so they can get a real tally on exactly how many people really do use Facebook. Of the 30 million Iphones that got spammed the Instagram app, many had a Facebook account that was under an alias or that was an unverified account.
Facebook in creating Instagram then buying it back was just finding a way to officially marry up Iphone IP addresses to pre-existing Facebook/Tracebook accounts.
Some estimates are that between 98% to 100% of the 35 million Instagram users already had one or several Facebook accounts. And of those users only an estimated 30-40% were verified users. We estimate Facebook will violate the privacy of up to 14,000,000 Facebook users as a result of this acquisition.
No one reads all the terms and conditions when signing up for a free app. Here is a link to the T&C for the free Instagram App Here
Here is a good part to read "If you disagree with any of these terms, Instagram does not grant you a license to use the Instagram APIs. We reserve the right to update and change these terms from time to time without notice. "
The vast majority of Facebook/Tracebook users prefer their private details not be sold as a commodity. These estimated 14,000,000 people didn't have a choice when their Instagram App was sold out from under their feet. It was a back door dirty move full of greed and justification. Many see too much legal repercussion coming from this move. Let me give you a could be example: John had a couple Facebook/Tracebook accounts. One was for his family, wife and kids and the other for work. John was a private investigator who dealt with sometimes emotionally unstable clients. One day after Facebook’s acquisition of Instagram, one of his dissatisfied and emotionally unstable clients found his real personal details on Facebook/Tracebook . He was able to do this because when he was logged into his own Facebook account he saw a photo in the section of his Facebook page titled: “people you might know” It was one of John's Instagram photos tagged on Facebook/Tracebook with his real details. John's client was able to find his real name , where he lived and basically everything about him after befriending John under another Facebook account opened under an alias. John was then stalked & murdered. The supposed conundrum is that John's family won’t be able to hold Instagram(who is now Facebook) legally responsible. This is because of the portion of the waiver titled: #10 "HOLD HARMLESS AND INDEMNITY." If John were alive he may feel he was tricked into signing that waiver by downloading Instagram to his Iphone after hearing about it on Facebook.
Facebook won't last with these type of bad decisions. When your business model revolves around selling humans private details to the highest bidder your bound to run into trouble. Facebook/Tracebook is becoming the internet and this walled garden is already rotting. Tracebook will crash because of Instacrap. Until then we all assume that they will continue to try and take over the world.
More Pages By Alicia B
How Student-Loan-Debt-Credit-Default-Swaps Will Brake the Donkey's Back in 2013...
An Operosness Yankee National Debt & The Devaluing Dollar
The End of High Frequency Trading