10 Apr 12
Facebook buys Instagram for $1 billion dollars (cue crazed genuis laugh)....
by Charlie Crawford, Director
Facebook’s bid for digital world domination continues with their recent acquisition of mobile photo app, Instagram for a whopping $1bn. At $1bn the price is the highest for a profitless startup since Google bought YouTube for $1.65bn in 2006.
Instagram is a mobile app sensation founded in October 2010 by Stanford graduates Kevin Systrom and Mike Kreiger. At the latest count it had been downloaded by over 30 million people. Its appeal is so huge that when the Android phone version was released this month, it was downloaded a million times in its first 12 hours alone.
The app counts the likes of President Barack Obama and, ahem, Justin Bieber and Kim Kardashian as fans and allows people to share photos taken on their mobiles with their friends through its own branded site or via Facebook, Twitter, or text message.
Photographers can use a variety of filters to alter the look of their pics, with names like Lo-fi, Earlybird or Nashville giving their images a vintage, old world feel. As Kevin Systrom says “We tried to lower the bar for producing awesome stuff, so people can walk around with their iPhones (and now android phones) and produce amazing pictures.” The apps founders like to say that the beauty of the app is that “it really democratises attention: everyone from celebrities to a random guy in Japan taking pictures of his dog every day can get many thousands of followers. Taking images is the great equaliser.”
Very noble sentiments, but does this make the app worth $1bn? The hot topic this week in the Blogosphere is why Facebook paid so much. Facebook’s founder Mark Zuckerberg’s stated view is that he sees the expertise at Instagram providing an invaluable resource for improving Facebook’s increasingly critical photo functionality and he sees the two entities coexisting for the foreseeble future. However, the Blogosphere has rejected this view with bloggers and comments boards going mad with speculation as to Facebook’s real motives for the purchase.
The most common recurring theme is that Facebook’s motive is purely one of eliminating the competition. Facebook had been earlier quoted as saying that they saw Instagram as “the biggest threat” to their monolithic empire. For a company that will reputedly be valued at $100bn when it goes public, a measly $1bn to eliminate your competition is small beans. In that context the bloggers view does make a twisted kind of sense.
However, other bloggers smell an even greater conspiracy with accusations being levelled that Facebook is trying to gain ownership of the rights to all our photo content. This view clearly holds some sway as evidenced by the mass rejection of Instagram users on the eve of Facebook’s announcement.
So where are Facebook going with all this? As Charlie Brooker puts it on his Twitter page “At this rate Facebook's going to end up owning the rights to all actual human faces”…….and other parts of human anatomy that I won’t mention here…
Only time will tell what Facebook’s real motives are but you can be sure of one thing – Facebook has a plan……..