NEW YORK (TheStreet) -- When Instagram agreed to take $1 billion from Facebook (FB) 18 months ago, it was a watershed moment -- not because it was a big deal for Instagram's founder and backers but because of the message it has since sent to any CEO and VC of a hot mobile/social start-up.
The message is clear: Don't you dare sell now because a better price is coming down the road.
Quite simply: the world looks back on that deal now and thinks that Instagram founder, Kevin Systrom, and his backers got fleeced by Mark Zuckerberg.
Sure a billion dollars is a lot of money, but so is $15 billion, which is probably what Instagram would be worth today if it was to do an IPO.
How do I come up with that number?
Instagram has 150 million users (at last count several months ago). Twitter (TWTR) has 236 million most recently.
Most of Instagram users, I assume, are in the U.S. or North America. Most (70%) of Twitter users are outside North America (and therefore are a lot less valuable to advertisers).
Twitter is worth $30 billion today on anemic revenue but big dreams of growing that in the next couple of years.
Instagram should be worth at least half that today -- and some might say it should be much higher given the more valuable user base -- even though it generates next to no revenues today.
It is a highly monetizeable service at any time when Facebook decides to flip the switch. And, as I've argued before, Instagram is really a new replacement social network for a lot of (younger) users. It's lighter, more visual and a great way to stay in touch with friends.