As Facebook CEO Mark Zuckerberg announced on his Timeline yesterday Facebook acquired Instagram for $1Bn. The news immediately became a global Trending Topic in Twitter. Previously Facebook bought many compaines notably FriendFeed & Snaptu but this by far is the largest acquisition by global social network giant, especially considering Instagram not having a clear business model yet.
Let's start by acknowledging that as humans we are visual creatures. When we see an image
So why spend a billion over a photo app. and why now?
Let's start by acknowledging that as humans we are visual creatures. When we see an image
we understand, learn faster & enjoy more.
As this graphic demonstrates brilliantly number of photos taken quadrupled in the last decade reaching over 380 billion in 2011. An average person snaps around 150 photos a year. Over 2.5 billion people has digital cameras around the globe today.
Facebook holds by far the largest photo library online with nearly 200 Billion photos already uploaded and we contribute daily to grow this inventory by uploading 250 Million new photos daily.
Facebook's photo library dwarfs all of other online libraries combined. Instagram makes up only a very small percentage of this library but it holds a strategic importance for several reasons:
Instagram is a mobile photography community where people share not only their friends and family photos but mostly express their visual experiences on various artistic forms by using simple filters. Both amateur & professional photographers come together to share their unique visual experiences.
What Instagram succeeded to do is to enable users to post great images on social networks by using simple filters. Photos with bad flash light instantly turned into cool retro images.
Therefore the app has tremendous intrinsic value.
What Instagram succeeded to do is to enable users to post great images on social networks by using simple filters. Photos with bad flash light instantly turned into cool retro images.
Therefore the app has tremendous intrinsic value.
Zuckerberg acknowledged this on his announcement by saying that his company would not be fudging with the Instagram applications for iPhone & Android but would instead use the purchase to "offer the best experiences for sharing beautiful mobile photos with people based on your interests."
The app. with over 30 Million users on iPhone alone. just launched for Google Android mobile devices and has been downloaded over 5 million times in its first week, demonstrating a huge potential for growth. Photographs are of strategic interest to Facebook and with the upcoming IPO valuation in May Instagram's mobile strength could be a threat to this evaluation.
Will Instagram loose it's cool?
As for die hard Instagram lovers, many posted black images after the announcement fearing the end of good days for their beloved photo app. After May IPO Facebook will be under the heat of widening commercial revenues.
We can see Facebook's hard push for monetization through it's recently announced Premium Ads and Reach Block features. Both advertisement models focus on display rather than CTR after that signals in itself a huge u-turn for the company's sales strategy. One needs to be very optimistic to hope that Instagram will be saved from this commercialization saga.
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