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April 10, 2012
Faced with its first serious competitor, Facebook has spent a billion dollars to purchase Instagram, a photo-sharing service. Why would Facebook spend a billion dollars on a photo-sharing anything? Why would Facebook promise to keep Instagram a separate service and invest in it?
Now Instagram does mobile photos better than Facebook .Instagram has become the Flickr of mobile photos. Instagram is popular in the mobile world which is where Facebook has struggled. If mobile is the future, then Facebook’s achilles heel is mobile photo sharing. Computing is increasingly going mobile and consumers are snapping up mobile devices with increasingly better cameras built in. This leads to Instagram.
In Facebook's instant Instagram gratification Charis Palmer says that:
Facebook's $1 billion purchase of Instagram is an acknowledgement that Facebook is basically a photo sharing business. If only Kodak had realised photo sharing was the future of photography, it might have bought, or at the very least partnered with Facebook, and wouldn't now be faced with a future that consists of little more than flogging off its patent portfolio
She asks will Facebook continue to identify and buy businesses that are strategic threats, or will it be leapfrogged by a faster, nimbler player that no one sees coming? Maybe Facebook is placing a roadblock in front of Pinterest?
Secondly, it's easier to buy a company than transform one. Facebook, like Apple, is big enough that it can buy impressive upstarts - even overpaying in the process - in part so that no one else can buy them instead. Facebook, for now, are many people’s “home base” to provide login, authentication and open APIs to cross-post content and opinions.
Maybe buying Instagram gives Facebook direct access to the photos shared as opposed to the indirect (only photos shared FROM Instagram to Facebook) and to ensure its continued dominance in photo-sharing. Though Zuckerberg promises a standalone Instagram, he will, of course, import all the pictures in their context and metadata, to be monetized like everything else is in the Facebook network.
Consumers appear to work with one major social media “hub” like Facebook then one, maybe two specialized social media sites that are somewhat connected back to the home base. There’s only so many sites we can handle. So Facebook becomes the best “home base” it can be, integrating and facilitating traffic between smaller, specialized social media services.
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There is already a service that lets you download and retrieve your instagram photos.