Originally posted on Gigaom:

It might have been just a regular Monday for most people, but the Silicon Valley/social-media sphere was rocked by a major bombshell: Facebook co-founder and CEO Mark Zuckerberg announced in a blog post that the giant social network is acquiring the popular mobile photo-sharing app Instagram for $1-billion in cash and stock. Om has written about why the purchase makes sense for Facebook, but some observers have argued that the dollar value of the deal seems almost unbelievably high — especially for a startup with no revenues and only a dozen employees. Is the acquisition another sign of an emerging tech bubble, or just a smart move by Facebook to lock up a potential competitor?

According to some estimates, the purchase price for Instagram works out to a massive $100 million per employee, which Naval Ravikant of AngelList argued should convince more startups to focus on their service rather…

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