If you’ve been paying attention to news in the social media world, then you know all about Facebook’s acquisition of the photo-sharing social app Instagram in April. But what is it that makes this deal stand out? Just about everything, actually.
The most striking feature of Facebook’s purchase was that it cost a whopping $1 billion. This is even more incredible when you consider that Instagram employs only 13 people. And despite its 30 million users, Instagram is barely two years old.
Essentially, what’s so surprising about this acquisition is that deals of this scale are rare. But if you’re a business student with entrepreneurial ambitions, it helps to understand the reasons underlying typical acquisitions.
Rhonda Abrams of USA Today covered the story in April, and she explains that businesses seek to acquire companies that have a specific market, invention, and/or great people. If, in the future, you develop a small business, Abrams would advise you to hire the types of people that can help your company grow. She also points out that you should seek patents for unique ideas, otherwise companies will try to develop their own version rather than join forces with you.*
If you pursue business opportunities using best practices, you’re more likely to succeed and enjoy your work, and these are more lucrative goals to seek than multi-million-dollar business deals.
Ready to hone your business skills? Pursue a business degree program to get started.
*According to “Small Business Strategies: Lessons from Instagram's Success” by Rhonda Abrams, USA Today, 13 April 2012.
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