The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.NEW YORK ( TheStreet) -- Facebook has acquired Instagram, an extremely popular mobile photo-sharing platform for $1 billion in cash and equity. Instagram was a 15-month-old startup which had attracted more than 30 million users on Apple's ( AAPL) iOS in less than 15 months, and more than a million users on Google's ( GOOG) Android in a day following the launch of its app on the platform. While it was still quite small compared to Facebook or Yahoo's ( YHOO) Flickr, the top image sharing platforms on the Web, it was growing incredibly fast, and continued to see high user-engagement levels despite the presence of scores of similar services.
This would also explain the seemingly high valuation at which Facebook acquired Instagram. Instagram finished raising $50 million at a $500 million valuation just a day before Facebook acquired it. Facebook must have had to shell out twice as much just to get them to sell quickly -- within a day -- without getting other giants like Google or Apple involved in a bidding war, which could have ultimately led to an even higher valuation.