The simple lesson of Google and YouTube, Facebook and Instagram

Google Facebook Instagram YouTube

Google bought YouTube for $1.65 billion in 2006. In 2014, YouTube alone will be responsible for about 20 percent of all digital ad revenue, top $1 billion in video ad revenue, and is quite possibly worth about $40 billion right now.

Facebook bought Instagram for $1 billion in 2012. It’s now apparently worth $35 billion, two years later.

For sure, you can hate on these numbers and say valuations aren’t real, Silicon Valley cash is made up, etc, etc. You wouldn’t be 100 percent wrong. But these two acquisitions, by two giants and rivals, are two of the better tech business deals in the past decade.


It’s really simple.

Here’s how it works. You can apply this to any aspect of your life, honestly:

1. Find something with value.

2. Connect with (or buy) that thing.

3. Mostly leave that thing alone and let it do what it did when you saw its value.

That’s essentially what Google did with YouTube, and essentially what Facebook did with Instagram — at least in terms of how an end user interacts with the products, as I have no idea what every meeting between Zuckerberg and Kevin Systrom is like.

Find value.

Connect with value.

Don’t try to over-manage the value you initially saw. Let it be.

This is how we should think about the hiring process, the forming of relationships/friendships, interactions with family, everything: find value, connect with it, and don’t try to manage it.

Simple but elegant, right?

Ted Bauer


  1. Interesting! Two of the most successful companies have the same business strategy with their acquisitions – go figure!

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