Chris Baus

Instagram Deal: Is Twitter the Loser?

Instagram

I just drove up from San Francisco to Tahoe and couldn’t help but mull over the Instagram/Facebook deal along the way. The terms of the deal are breathtaking, which leads to the natural conclusion that there were multiple suitors bidding on the company – and I’d have to expect Twitter was one of those suitors.

Interestingly, according to Tech Crunch, Jack Dorsey (Founder and Executive Chairman of Twitter) and Chris Sacca (early investor in Twitter) were investors in Instagram’s Series A round in which the company raised $7 million in February of 2011. Which potentially puts Dorsey in an odd position of holding shares of one Twitter’s biggest competitors.

This was Twitter’s deal to lose, but at a $1 billion valuation, it probably was too rich even for Twitter.

Update: Kevin Systrom interned at Odeo so the connection with Twitter goes back quite a ways.