Alan Draper
Have you heard? Facebook has bought Instagram for the whole $1 billion. And it’s not a joke, it’s real, and the deal has already been closed. Naturally, whereas negotiation process was hidden from the open public, its result has seen huge media coverage, and you can hardly find a news site, not even a tech-related one, which hasn’t yet written about it.
Why and What for?
So, it has happened – Facebook now owns “Instagram treasure”, which has already got over 25M fans in different parts of the world; and the major reasons for such a purchase are understood.
To start with, Instagram is, undoubtedly, the TOP-1 photo application among versatile groups of users, and it has loads of potential for the future development after the introduction of its Android version, which has got more, than 1 million downloads within the first 24 hours. Of course, some of the devoted iOS fans don’t seemed to be utterly happy with the fact that they no longer have such a unique app at their disposal, but the complaints are mere complaints, nothing more. In this respect, now that FB owns Instagram, it will be able to present a couple of new features for their users, like the ability to edit the stored photos with Instagram filters, for example.
Moreover, Instagram user database is seemingly a potentially profitable field for advertising. In case you haven’t noticed, there are absolutely no ads displayed within the app now, well, with the new FB owners the situation will surely change. Namely, one more benefit, regarding mobile ads in Instagram, presupposes the opened geotargeting opportunities (the user’s location info is stored, while any Instagram photo is taken).
The expanded advertising possibilities have, perhaps, become the main factor in establishing the price of Instagram – $1 billion. Many analysts say it costs much less, but FB owners have supposingly got scared that the growth of app popularity would boost its price even more.
As for Instagram owners’ motivation to sell, it’s crystal clear – money. The thing is that having been launched as one more interesting startup, Instagram has gone beyond the limits, and would soon inevitably face the necessity to start monetizing its audience, e.g. insert mobile ads as well. Now they have acquired a fortune at one single moment.
What’s now?
Despite the fact, that the deal has been just closed, the users’ reaction is already visible, and it isn’t as positive, as Mr. Zuckerberg has probably expected. In fact, a great number of Instagram users have already deleted their accounts, having heard the news about the huge purchase. They have got different reasons to stop using the application, of course, from privacy concerns to unwillingness to deal with some of the annoying FB fans wishing to friend and follow everyone.
Besides, many people are simply furious about the fact that the cosy and friendly Instagram community is being converted into another mass market product.
Here, no matter what the reasons are, the result is the same – many users are deleting their accounts at the moment. Certainly, it doesn’t mean that no one will eventually be left using Instagram; on the contrary, the deletion process will soon be slow down, if not stop for good.
As for users, who have quitted the service, those will probably find other crazy ingenious photo-apps to share their photos via e-mails, Twitter, or 4shared, or even Facebook, yet without any worries about their personal data, or else.
This article was written for Business 2 Community by Alan Draper.
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