Instagram, the popular online image website has now been acquired by Facebook. The popular news is there all over the internet. People are eager to know about it and the keyword is getting hits from all over the globe. The Instagram, the image related site, having the user database of about 40 million people, has been dealt by the Facebook, for a huge amount of 1 billion $. The experts are claiming that Facebook invested that big money in Instagram that it did not deserve at all. Facebook is known for its great deals, while acquiring other networks. Then Why Facebook made big investment in the company, with No Revenue. The same question may be striking your mind as well. So let’s try to solve the puzzle.
- Facebook Bought Instagram
1. Facebook Wanted to Acquire Instagram Before Any Other Could Do
The top reason for this surprising deal is the race of popular networks like Google, behind the Instagram. Google Plus has got new lookout and could get the Instagram in their network. If this was happened, then Loss, Loss and totally Loss were there for Facebook.
2. Majority of Facebook Users Use Facebook for Photo Sharing
It has been surveyed that the majority of the Facebook users are there to look at others photos or to upload their own. Facebook’s image features are good, but Instagram can make it best. The integration of Instagram will allow the Facebook users to add more filters and effects to their images. So integration of Instagram in Facebook – Better Image Filters – More Users.
3. Better Mobile App
When It comes to the image sharing, the Facebook falls in mobile users. The Facebook has good features in image sharing for the desktop users, but the same is not true with the mobile users. Many Facebook users access Facebook from the mobile and if their sucking mobile app would keep up going like this, then loss in no. of mobile users, that Facebook will never like to happen.
4. Better Mobile Ads
The Facebook has fewer relevancies in delivering ads on mobile. Instagram knows that what the users are interested in, better than Facebook. Integration of Instagram will help in delivering more relevant ads for the mobile users, which will result in more PPC and thus more Revenue for Facebook.
5. Facebook Is Scared
Yes, the other reason can be that, Facebook is scared. It always has been facing competition from the other networks, from the very first day of its launch. But with the launch of Pinterest, it seems that for first time, Facebook has got a tough competitor. Users are preferring Pinterest more that the Facebook. Facebook wants to be the best always and Pinterest can eat up its popularity. It is the first time that Facebook is scared from any image network and this make the Facebook to take this step and to make an investment of 1 billion $ in Instagram, the company with no revenue.
An image is better than 1000 words and by this surprising deal, Facebook has proved it.
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About Amit Shaw
Great, i agree with the last point that u mentioned , Great post.
nice post.. it seems facebook is scared . but you should also appreciate their business strategy. social networking is turning out to be a very competitive market.
i prefer Facebook over Google. Good luck Fackbook
nice post thanks for sharing
Hehehe 😛 Facebook scared agree Pinterest gain too much popularity but I don’t think in coming 2 year there was any Social Media that openly challenged Facebook.Facebook just want too give more option to there user I agree with your photo sharing idea it seems worthy
facebook scared? 😛 No way. It’s giving too much flexibility to their users and I think as Rizwan said, no other media can challenge facebook, because it has “addictive users”. Which is really important to consider before you say anything 🙂
This is the topic I wanted to see here, and I saw with a nice way of presentation. Go go go…
Facebook is such a great competitor to all the websites available in its field. I love how they handle their business strategies. Keep up the good work amit 🙂 🙂
As of now, 2012 has been a season of social media acquisitions. Its either Facebook vs Twitter or Facebook vs Google (imp) all the time. Last point holds merit. Facebook wanted it before Google or Twitter bought it. Now let’s see what they do with it 🙂
BTW, 12 hours back, Twitter acquired another company – Hotspots.io
Thanks Chitra for dropping your comment.
Thanks for sharing the news that Twitter Acquired Hotspots.io. Great.
Keep Visting.
With this, I hope that now the photos don’t loose their quality when they are being uploaded.
Nice post Amit , I’m a regular reader of your blog. It would be Nice if you add page navigation to your blog’s homepage
I still don’t see the need to pay a billion dollars for it. Unless Facebook thinks it can generate an income that will negate that price within the year. There’s tough competition within the social media platforms and you can never say if Facebook will still be popular in 6 months time.
Facebook is scared? I think it’s more of “I have the money, I’m powerful and I’m the boss!” that kind of thing if you know what I mean.
Hey Amit,
Very interesting to read this.. Yes, Instagram is really the awesome way to share and upload photos and I think after the rapid popularity of Pinterest, Facebook have applied this business strategy to let the fear away of being defeated by Pinterest. In fact, Facebook can’t be challenged as it’s the best Social network ever..
nicely put your points. if a company is investing such a big amount in buying a product then surely it has motive behind it. Facebook going to do something very big thats why it purchased instagram
I agree with all your points, especially the first one (though I don’t think the loss would have been huge unless G+ becomes a lot more popular) – easy option to buy because Facebook were sat on a pile of cash. However, this current obsession with number of users and not profit (or even revenue) generation is so similar to the dot com bubble just 13 years ago…
$1bn was too much though I read that Instagram were actually asking for $2bn so it could have been worse!
Instagram is good… facebook is right in buying so. However still pin-interest cannot beat facebook at any cost!!
Thanks a lot @Ankit for dropping your comment. Glad to see your comment.
I think not only pininterst, No one can beat Facebook 🙂 Keep visiting. 🙂
Thanks man.. Its was a pleasure reading your article!!
Great post and I think that last reason is the best one, competition and new and better things can scare some old guys and can make new rules even without any revenue.
thanks for sharing
Totally agreed with the 5th point . facebook was scared, hell yes, why wont it be, if pinterest would have bought it , Millions of people would have been editing and sharing photos worldwide at the moment.
I definitely agree with No.4. Facebook did a smart move in buying Instagram. More revenue is exactly my thoughts about it. Facebook right now makes a killing off advertising revenue from various companies, I’m sure with the expanded user base of Instagram (mobile app). Their revenues will sky rocket!
Hi Amit, Firstly Really Informative and Innovative topic. And it’s true that Facebook did a smart decision buy buying Instagram and Maybe, this can widen the exposure of facebook.
Good one. 🙂
I don’t think facebook should be scared of something . pinterest is good but not for everyone . Other social medias need to work really really hard to even think that they can compete facebook !!
i also think that facebook is scared of google and always wants to be in the safe side so they Bought Instagram.