Facebook Buying Instagram Makes Perfect Sense
Mark Zuckerberg announced this morning that Facebook has “agreed to acquire” Instagram for a cool $1 billion. The tiny team that took over the mobile world will now work at Facebook. Instagram launched on Android last week, much to the chagrin of many special-snowflake iPhone users, and this news is sure to bum them out even further. But Facebook rules photos, and Instagram is the new camera. This deal makes perfect sense.
Facebook reportedly failed to cut a deal for Instagram last year, and then it began working on Instagram-like photo filters of its own. That was back in the dark ages, when Instagram users had only uploaded a mere 150 million photos. By 2012, Instagram could ask for much more favorable terms.
Yet Instagram didn’t have a business. It wasn’t going to make money by building its own ad network. It wasn’t going to succeed by selling new filters. Instagram built a pitch-perfect mobile social network for the smartphone age. Facebook needs one, and it didn’t have one. Now it does.
A billion dollars sounds like a lot for an app that generates $0. But Facebook is about to go public, and this is a drop in the bucket compared to its potential valuation. Facebook is the de facto place for people to share photos. The Instagram integration with Timeline has been beautiful. This is a natural fit.
Facebook is now the big screen for viewing Instagram photos.
Sam Odio, Facebook’s Photos product manager from April 2010 to June 2011, says “the 1BN acquisition price is almost certainly the result of a bidding war. It’s unlikely they purchased this for the users, the team, or the product.” The point about the users is well taken. As Odio says, “Most Instagram users are already on Facebook (or have made a conscious choice not to join).”
The product makes sense as part of Facebook’s portfolio, and Odio believes it will “certainly strengthen Facebook’s Mobile Photo offering. I could see this becoming a stand alone Facebook mobile application, much like Facebook Messages (though possibly retaining the Instagram brand).” But is Instagram worth a billion dollars? Not in and of itself, but the equation is different if you’re Facebook. “My guess is that Facebook bought this to keep it out of Google’s hands,” Odio says.
At this point in Facebook’s trajectory, focusing on the size of this deal misses the point. This acquisition is an improvement to Facebook’s already-dominant photos product, and it’s a way to tie more Facebook activity to a mobile experience that, unlike Facebook’s own apps, does not suck at all.
Instagram is hot. It has more than 30 million users and a fairly consistent experience across both major smartphone platforms. Why would anyone spend $1 billion to shut down something beloved by tens of millions of people? Especially Facebook, for whom this product is a perfect fit?
What About Privacy
The biggest red herring of this whole story is privacy. Ordinarily smart people are having Twitter tantrums and deleting their Instagram accounts over this. What on earth is the motivation for that? There isn’t even a rational argument about what Facebook could do with your Instagram “data.” If you have a public Instagram account, what could change?
You’re welcome to not have a Facebook account, and if the day comes when you have to have one to use Instagram, your privacy concerns might bear out. But quitting Instagram out of pure protest? That’s a waste.
This small team just wrote a heroic story. A real zero-to-hero tale. Google buying YouTube is an instructive example here. Sometimes, when a tech giant bets big on a rising star, the results are world-changing. Except with Facebook and Instagram, the pairing makes even more sense.
View full post on ReadWriteWeb
No comments yet.
No trackbacks yet.
May 22, 2013 - 10:04 am
The unveiling of Facebook ‘Home’ felt like one of those key moments that really polarize opinion. It’s the current Marmite of the tech world; some people rushed to cover their screens in juicy Facebook goodness, others saw it as evidence that the Mayans were a year out. I guess I fall somewhere in between, which makes me the exception that proves [...]
May 21, 2013 - 7:55 am
Browser maker Opera just released a new version for Android with a slew of new features, an upgraded design and better performance. And, for the first time for Opera, it is not running on its own Presto rendering engine. Opera for Android is running WebKit. In February, Opera said that it was ditching Presto in [...]
May 19, 2013 - 9:55 pm
Yahoo is expected to announce the acquisition of blogging site Tumblr for $1.1 billion on Monday, with both companies’ boards having agreed to the deal, according to reports in AllThingsD, which first broke the news of sale talks, as well as the New York Times and the Wall Street Journal. If it goes through as planned, [...]
May 17, 2013 - 10:04 am
Who else has completed more than 80 years of Olympic Partnership with largest-ever activation? Which brand has ever covered more than 275,000 miles across 186 countries in 365 days? Who gets the credit for activating a campaign that made fan cast nearly 910,000 votes, almost 7.3 million sabotages and accounted for virtually 3 million YouTube [...]
May 17, 2013 - 5:28 am
Is Facebook – and to a lesser extent Foursquare – becoming more Yelp-like, and thus a threat? Some might believe the answer is an obvious yes, but it’s worth looking at some of the moats Yelp has built in local search that won’t make it so easy. View full post on Search Engine Watch – [...]
May 16, 2013 - 2:55 pm
With a whirlwind of announcements at its Google I/O developers conference this week, Google’s vast suite of social products is finally starting to look like it was created by a single company and not cobbled together via a series of haphazard acquisitions. Here are the highlights of what’s changed: Hangouts: Google Messaging, Unmessy At Last [...]
May 16, 2013 - 1:55 pm
The universe of apps for Google Glass, initially limited to the New York Times and the social network Path, is expanding rapidly. Google on Thursday announced several more entries to its Glassware stable: Facebook, Twitter, Evernote, Tumblr, CNN news updates, Elle fashion features and a Glass-only game called Ice Breaker. Look for more Glass apps to surface [...]
May 16, 2013 - 1:26 am
[Beauty pictorial] What makes Seo In young a spring goddess?Yahoo! Philippines NewsLast year, Seo In Young launched her own beauty brand 'Edgy Fit' in collaboration with Coreana Cosmetic, and she recently shot seasonal beauty pictorial for brand new 'Kill Heel Swing Mascara.' Seo In young creates a lovely look with pony tail and … View [...]
May 13, 2013 - 11:28 am
You will now be allowed to directly engage with your Facebook friends right from Bing’s search results pages. The new tool will allow you to ask questions or provide comments or answers on posts that are relevant to the search. View full post on Search Engine Watch – Latest
May 12, 2013 - 12:04 pm
It’s been interesting to see the increase in social media ad spending as of late. A recent study based on a survey of over 500 online marketing and media professionals throughout the U.S. revealed that 64% of them planned to increase social media spending by as much as 10%! With over 650 million daily active [...]