It is now official after three days of a lot of online buzz that Facebook really means business when it comes to photos. Case in point? Nothing further than its recent acquisition. The emergence of the so-called Facetagram, a term that has popped in the blogosphere for describing the new found partnership of a startup that redefined image sharing on mobile platforms and a giant, a juggernaut of sorts, which is the true hallmark of anything to do with social networking and social media. Ladies and gentlemen, the week started with the big buyout of popular photo app Instagram by Mark Zuckerberg’s Facebook.
The deal to buy Instagram was reportedly reached after direct talks between Mark Zuckerberg, the young CEO of the world’s 500+ million social network, Facebook and Kevin Systrom, the 28 year old co-founder of Instagram. Why direct talks? Well because Facebook has a long history of killing startups/services they acquire by fully integrating them with its own existing services and leaving users of the previous service orphaned. Good examples here are Gowalla, a geo-location Foursquare-like service that I enjoyed using sometimes back and Snaptu, the application that taught me how to tweet. Both were acquired by Facebook and had the services shut down much to the dismay of millions of users who were already hooked to them. This is where I laud Messrs Systrom and (Mike) Krieger, the Instagram co-founders who made sure Zuck and his monster did not leave the 31 million plus (and growing) Instagrammers.
The ink on my writing of the PC app, Instagrille that brings Instagram to the Windows desktop environment had not yet dried when the announcement of the buyout came. Well, a billion bucks makes Instagram’s venture capitalists who had just closed a lucrative round of funding and the two co-founders and their nine staff (yes, nine staff) stinking rich. All this for a startup that is barely 600 days old and with 11 employees (including the two co-founders)? Talk of getting your target audience hooked and this is it. Why did Facebook, a big company preparing for a major IPO soon and with a global user base of over half a million decide to dole out $1,000,000,000 for a startup that was recently valued by financial market analysts at $500 million? Well it is because this startup was a big threat to Facebook’s core feature and most popular feature, photo sharing. This is why Zuck moved in fast to acquire Instagram at an incredible price. Both CEOs, Systrom and Zuck stated in their blog posts that both companies stand to benefit from the new merger and this should not be lost on anyone since Facebook has a huge talent pool of skilled engineers and massive cash reserves so Instagram and its lean staff of nine (eleven?) stands to gain a lot while still giving Facebook leverage over the photo sharing field.
The good news is that Facebook has decided to go the Google way. Remember Google acquired YouTube way back in October 2006 (at around $1.65 million) and left the popular video sharing site to run on its own instead of merging it with the now defunct Google Video? Online marketplace eBay also bought a startup in the name of PayPal and let it run independently. Today PayPal brings in as much revenue as eBay itself does. I don’t have to quote the profitability of YouTube since it is all open for everyone to see. Yes that’s the case here. Instagram will continue being as it is with Systrom still heading the team. We will still be free to share our photos to rival social networks like Tumblr and Twitter and even ignore Facebook in the process. I hope this is what will continue to happen as the two CEOs promised because I, like the millions of others who quickly signed up for Instagram when it debuted on the Android platform, have just joined the party and we don’t want interference of any sort. If anything, the experience should even be enriched and get better every day.
There are concerns that Facebook will take the geo-location data (from geo-tagged photos) and other demographics of the millions of Intagrammers and use it to push ads to Instagram users. I hope this does not happen. I am aware Instagram was and still is a free app and there has been no definite revenue model but our experience as users should not be short changed for the need to make money. (But definitely in the end they will have to make money since it is a business like any other and not a charity). The two companies are experienced and can come up with a better revenue model that does not put the users’ privacy at risk. Remember Facebook has a bad history as far as user privacy is concerned.
The buyout has received mixed reactions with many users taking to Twitter to denounce it and even saying they will deactivate their accounts. There has even been a major resurgence of the number of services that offer ways of downloading or migrating to other sites all your photos from Instagram.
It will be interesting to see how things turnout in light of these new developments.
- Instagrille: Instagram for Windows PC
- Instagram for Android: It is Coming
- Late Party: Instagram for Android is Here