A day ago, Facebook decided to acquire the wildly popular photo-sharing service, Instagram. This move by the social network has been viewed with a lot of intrigue and interest by tech analysts as well as the users. We don’t yet know how will it affect Instagram itself but in this article, we will try to elaborate as to why would Facebook buy such a company by paying a whooping one billion dollars.
Many analysts have wondered that perhaps Facebook made this move to eliminate competition. Because Facebook’s photo-sharing feature has been one of the most used feature online. And now with the growing popularity of Instagram, it seemed that the app would become the most popular photo-sharing medium. So perhaps Facebook bought away the company to make sure it can maintain its hegemony in photo-sharing services, even in the realm of mobile platform.
How does one essentially differentiate between the services. It can perhaps be summed in the words of Om Malik who wrote, ‘Instagram is the exact opposite. It has created a platform built on emotion. It created not a social network, but instead built a beautiful social platform of shared experiences. Facebook and Instagram are two distinct companies with two distinct personalities. Instagram has what Facebook craves – passionate community. People like Facebook. People use Facebook. People love Instagram. It is my single most-used app. I spend an hour a day on Instagram. I have made friends based on photos they share. I know how they feel, and how they see the world. Facebook lacks soul. Instagram is all soul and emotion.’
The theory that Facebook made the move to essentially remove competition does make some sense when we see that Facebook bought the company at nearly twice the amount at which it was actually valued by analysts. Moreover, photo-sharing is perhaps one of the most-used and key features of Facebook – and if Facebook was divorced of it on the mobile platform, it would have lost the battle for the future of mobile social interactions.
Mark Zuckerberg wrote in his post about the acquisition, ‘This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.’
However, another reason for the acquisition could be that Instagram’s user interface is a lot more appealing than that of other social networks such as Facebook and Twitter. It is artistic, and as a result ads placed on such an interface may attract lot more users. This means that Instagram’s mobile-ad model is more successful than its counter-parts and Facebook may have viewed this part as a valuable asset.