The Acquisition of Instagram Made Sense to Facebook Even at the Time ⇥ nytimes.com

Mike Isaac, New York Times:

In 2012, when Facebook chief executive Mark Zuckerberg cut a $1 billion check to buy the photo-sharing app Instagram, most people thought he had lost his marbles.

“A billion dollars of money?” joked Jon Stewart, then the host of The Daily Show. “For a thing that kind of ruins your pictures?”

Mr. Stewart called the decision “really lame.” His audience — and much of the rest of the world — agreed that Mr. Zuckerberg had overpaid for an app that highlighted a bunch of photo filters.

While Stewart’s bit remains funny, I must again note that many people with actual expertise in this area treated the acquisition as a reasonable cost to neutralize a surging competitor.