You're ultimately right, though future EBITDA (or future dividends) is more interesting than current EBITDA. Otherwise a pre-launch startup with no revenue and interesting technology would be worth $0, and a declining company with $1B of EBITDA would be worth the same as a growing company with $1B.
The question is whether Instagram can eventually contribute enough to Facebook's bottom line to justify the $1B valuation. Its current (lack of) revenues obviously don't get it there, but it's the future that matters.
The question is whether Instagram can eventually contribute enough to Facebook's bottom line to justify the $1B valuation. Its current (lack of) revenues obviously don't get it there, but it's the future that matters.