I don’t know if Stephen Colbert ever promoted Instagram on his show, but they clearly don’t need the famed Colbert bump after Facebook’s $1B acquisition announcement. In fact, you could say that the Valley, namely the Internet consumer side, has just received the Instagram bump as the pricing ripples instantly, perfectly, through venture valuations.

Of course, there are differing views on whether it’s a one-off or a bellwether, but the bottom line is well, the bottom line — the math is there to stay for current deal valuations, however you spin it. Apparently the valuation worked out to something like $33 per user, since if they were just paying for the team of 12 that would be a very large number for headcount. Regardless it feels like someone who doesn’t mind paying whatever it takes for a must-have, because they’re flush with money, and so it’s sort of play money of course in the most serious, pre-public kind of way. I like the quote from Jeremy Liew of Lightspeed in the Mercury News, about how with just Google in the market you couldn’t have an auction, and now clearly you can.

But already the conversation has shifted to how Facebook is going to wreck Instagram, and ruin everyone’s privacy. Obviously they have product integration issues in terms of how the terms and policies of the respective businesses are run and merged, but it’s a newer venture so the path is really in the going-forward integration assuming they don’t screw it up or rile their users, any more than they usually do.

The larger questions in my mind are really (i) what does or should the young demographic really expect in terms of ultimate control of their content/info, and (ii) how fickle are they in terms of where they will go next? Probably fickle enough to worry Facebook about the next-new-thing. And I say “young demographic” to mean the advertising demos of 12-17 and 18-24, because they’re where you can see the future. 18-49 is less interesting because that reaches up to people like me and well, we’re not digital natives like them, we’re wannabees.
In a Linsanity, Instagram world, I wonder what’s next?

Below:  Mark Zuckerberg with new Instagram buddy!