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The Lowdown: Facebook Buys Instagram For $1 Billion; What Next?

Social networking giant, Facebook, has acquired mobile photo sharing service, Instagram, for $1 billion in a cash and shares deal. This would be one of Facebook’s most major acquisitions since the service has a large number of registered and active users. However, Facebook CEO, Mark Zuckerberg, has said that the company will build and grow Instagram, independently, and that it will be “mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook,” despite the two being complimentary to each other.

Ability to cross post to remain: He has also assured that the ability to cross post photos to other social networks will be retained. He added that, Facebook will try to help Instagram to grow further  by leveraging Facebook’s strong engineering team and infrastructure, while it will learn from Instagram’s experience to integrate similar features into its own products. Zuckerberg also clarified that Facebook does not intend to acquire more companies, if any, with a user base, this large.

30m users on iOS app: Instagram allows users to take photos, apply different effects through filters and share them with other Instagram users, in addition to cross post to Facebook and Twitter. Instagram users can follow other users, and comment or like photos. Within two years of starting as an iPhone only app+service, the service has managed to gain a considerably large user base. According to Instagram, the service has more than 30 million registered users, who upload more than 5 million photos ever day. More than 1 billion photos have been uploaded, so far, and Instagram witnesses 575 likes and 81 comments every second. The user base is all set to expand further, as Instagram extended its app to Android users. Interestingly, 430,000 users signed up on the waiting list, when Instagram announced the forthcoming launch of its Android app. It clocked 1 million download in 24 hours after debuting on Android.

So What does Facebook Get?

Earlier, Facebook had acquired featurephone app+service Snaptu, which was later stripped off other social networks and converted into ‘Facebook for Every phone’. The app did not have a large user base, and Facebook was eager to reach out to feature phone users, which Snaptu was already doing, so it was easy to convert it and made sense for Facebook.

However, as reflected in Zuckerberg’s post, the company will have to be careful in forcing any kind of integration with Facebook, since a lot of users see Instagram as more than just a photo sharing service. We’re already seeing tweets from disgruntled users, planning to give up on using the service.

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Emotional connect: There are a number of photosharing apps and services, and even Facebook offers mobile apps which are deeply integrated with some smartphones, but Instagram has been able to offer an emotional connect – the feeling of sharing day to day photos, enhanced with filters, is like sharing moments, with a closed group of friends. It’s somewhat different than uploading your entire vacation shoot, online. So, this is going to be tricky for Facebook, as it would have to address concerns related to privacy.

Optional integration – Perhaps, Facebook could start with optional integration, and use data from users who give their consent, enabling open graph access and automated sharing. It could also fine-tune its mobile apps to offer a better photo sharing experience, or maybe just implement Instagram filters on its photos.

A Facebook Photos app – It could also create a separate Facebook photos app. Facebook’s mobile apps are on all major platform, but there’s plenty of room for improvement.

Improve the UI of its mobile apps– One of the key reasons for the success of Instagram was its user interface, which Facebook can leverage to improve its mobile experience.

Should keep it ad free– Given the fact, that even Facebook’s mobile apps also don’t feature advertising, we don’t think it will force ads on Instagram, if it’s really serious about growing the platform.


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