I had a post scheduled for later on this week talking about my recent love affair with all things Instagram (even though I don’t actually own an iPhone) however, some news is breaking right now that kinda needs covering.
Facebook just bought Instagram, for $1bn.
That’s right: One. Billion. Dollars.
Stefan nailed it –
All you guys tweeting about how sad it is that the instagram guys sold out: shut your face. Do you know how much $1 billion is?
— Stefan Constantine (@WhatTheBit) April 9, 2012
Well, do you? It’s a lot.
But why?
To start us off, here are some numbers* to get your head around taken from the mere 18mths that Instagram has been in existence:
1 billion photos uploaded- 30 million registered users
- 5 million photos uploaded every day
- 575 likes every second
- 81 comments every second
- 1 million downloads of the new Android app in 24hrs
That’s a lotta love for an app that is solely mobile-based. But why is that important to Facebook? Think about it – Facebook is about the data. As the saying goes: if you’re not paying for the product, you are the product – and Instagram just sold a whole ton of data about its users. Not personal data, or contact data but image data and sharing data.
What people snap, what filters they apply when they’ve snapped and where & how they share that snap is all important data for a social network that builds itself around social objects and the relationships that people form around them.
While this kind of purchase is new ground for Facebook, it’s refreshing to see that it has every intention of keeping the service independent and multi-platform friendly. Mark Zuckerberg has already talked about lending Instagram Facebook’s strong engineering team and infrastructure – something that they’ll need when it comes to the building for scale. That sounds like someone who only has the app’s best interests at heart, certainly.
And while a billion dollars is a lot of money, Facebook has just bought itself its own standalone photo-sharing app, with a built-in base of happy users while at the same time cancelling out a potential competitor in the lucrative social networking space. Good things will come of this acquisition, Yahoo + Flickr this ain’t.
As Instagram CEO, Kevin Systrom, blogged earlier today –
It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.
Remember, the future is mobile and Instagram have proven that a mobile-only social network is not only worthwhile but 100% achievable to boot.
Best of luck guys (all 13 of you); your fans, users, industry and investors will be watching.
*since April 3rd, 2012 – source
UPDATE – Other posts of note:
- Instagram’s ride to glory, TechCrunch
- 15 responses to the FB / IG sale, ReadWriteWeb
- Facebook just saved Instagram, TheNextWeb
- What the tech pundits don’t get, Fast Company
Thank god someone has understood the reasoning behind this:
http://venturebeat.com/2012/04/08/how-much-is-a-tweet-worth-about-110000-as-much-as-a-yelp-review/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Venturebeat+%28VentureBeat%29 <~ So, now let's imagine what an instragram is worth?
It’ll be interesting to see if Facebook attempts to monetize Instagram in an effort to recoup some of those costs. There are a handful of no-brainer ways to do this
1. In-app purchase of extra filters/frames – honestly, I don’t know why Instagram didn’t do this themselves. This is an absolute ‘duh’ opportunity, and wouldn’t alienate existing users at all.
2. In-stream ads – this is the most likely thing Facebook will do. Sponsored Stories, etc. It’ll also be interesting to see how Instagram changes with a nod to brands. Currently, brands have exactly the same experience as normal users on Instagram. Would be nice to have some additional features/analytics as a brand.
whatleydude Reply:
April 10th, 2012 at 23:16
So point one is, as you say, a complete no-brainer however, point two is where things start to get interesting:
I’ve been toying with a thought lately about whether or not brands should become media publishers. Given the recent changes to Facebook Timeline (where rich media is not only encouraged, it’s practically endorsed thanks to the Edgerank algorithm) as well as the image-friendly nature of Google+, one has to wonder what media – in today’s world – means as a value proposition to brands.
In-stream ads? No chance. Brands creating *gorgeous* content that I, as a user, not only allow but actually enjoy too, well that’s a different story entirely.
In-stream ads for Facebook don’t make sense to me, like in-stream ads for Twitter – they’re just ugly. However, images do kinda make sense.
What brands choose to do with this information however, is another story entirely…
Of course, by ‘ads’ I meant promoted content – whatever content is appropriate for the medium (in Instagram’s case, this is obviously photos).
Interesting that you say you don’t like in-stream ads for Twitter. As a marketer, I love them – I’ve used them often, and find they perform quite well for what I want them to do.
The trick, though, is two-fold:
1. Promoting appropriate content. Right now, for RadioShack’s Promoted Tweets campaigns, I have my budget split up into 6 different campaigns, each with a specific ‘type’ of target (based on various factors that I can target within Twitter) and I’m very careful to only promote tweets in the campaign that they’re appropriate for. This is a MUST for brands who choose to use this type of ads, so as not to annoy users
2. Users understanding – most users would likely be surprised to know how twitter ads can be presented to them. Normally, it’s based on ‘interests’, which Twitter itself identifies based on the type of content that a particular user responds to. Think of it like the ‘Topics’ section of Klout, only not really game-able (and with no ‘score’ attached). If I talk about corvettes all day long, I’m only going to see ads on twitter from brands who are targeting people who are interested in corvettes (obviously this can be abused, but to do so is wasteful on the brand’s side, see #1). Yes, you can still target based on search keywords, but those tweets don’t show up in a user’s timeline unless they actively search for that keyword.
I don’t know that I would pay to have my Instagram photos promoted (speaking as a brand). It would depend largely on a number of factors.