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Today I woke to the news that Facebook has acquired Instagram for an amazing $1 billion. It’s Facebook’s biggest acquisition to date and has made Instagram, which is a mobile photo sharing app with over 30 million users, more valuable than the New York Times.
The acquisition has been met with a fair bit of backlash and Facebook has inevitably come under fire for seemingly buying even more data to improve its targeted ads. However, it's the 'selling out' factor that has been a cause for concern for the majority of Instagram users who believe that the costly Facebook takeover is disastrous for the credibility of the brand. Thousands of Instagram users are now threatening to close their accounts, with Twitter becoming the most popular platform to vent rage.
Instagram Twitter backlash
What is Instagram?
If you're still a little unfamiliar with Instagram, here's a brief description of what it's all about. The app allows users to upload photos via their mobile and use different filters to achieve their desired look. Once a photo is uploaded, other users are free to 'like' and comment. Sounds a bit like Facebook, doesn’t it? Like its new owner, Instagram is also used by brands and businesses to connect with their market. This includes the Tiffany & Co Instagram campaign, which was part of an initiative to enhance the brand behind those famous Tiffany boxes. This was achieved by uploading photos of happy couples via Instagram in a bid to sell 'true love'.
Tiffany & Co Instagram
The $1bn Takeover
So why did Facebook splash out so much? To me the price tag just seems too high and the damage it’s already done to Instagram spells the end of the brand as we know it. Despite this, Facebook CEO Mark Zuckerberg has stated that the main goal is to “help spread this app and brand to even more people” and this means avoiding a direct integration with Facebook – a mission echoed by Instagram CEO Kevin Systrom.
Users will still be allowed to post to other social networking sites like Twitter, but Facebook will own everything that is uploaded. However, i'm sceptical that Instagram will really stay the same. For example, campaigns like the Tiffany & Co Instagram above can be launched relatively cost-free, but I sense that the new takeover will eventually see Facebook advertising extend to this app.
Of course, purchasing the leading mobile photo sharing app is easier than creating and launching a new one, but I wonder if it could result in a huge loss for Facebook if people continue to ditch Instagram for ‘selling out’? After all, Instagram is only 15 months old and is still yet to make any actual profit. Plus, with other photo sharing sites, such as Pinterest, I’m not sure Instagram really has the longevity that Facebook thinks it does.
Despite of all of this, it does display the growing importance of mobile engagement. Instagram will remain a mobile app and its $1bn price tag proves that Facebook sees it as a very valuable part of its future.