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May 1, 2012

Facebook Buying Instagram – What Could It Mean for Us?

imageIn the last month it was announced that Facebook will be buying Instagram for a total of $1 billion – this includes $300 million cash and 23 million Facebook market shares to the Photo sharing App. In the S-1 statement, Facebook stated that it has 901 million active users every month with 300 million photos uploaded per day.

This seems like a lot of photo activity already – so what benefit will they gain from buying a Photo Sharing App for such a high price when it doesn’t even gain any revenue?

While PRs and Marketers ride on the social media train with no idea of its destination, it will be interesting to see how this unfolds for us all.

From Facebook’s perspective

The day after Facebook announced its acquisition, Instagram’s downloads hit 5 million in 6 days. The acquisition was splashed all over Facebook, Twitter, newspapers, TV and through online commentators. The publicity gained from this drove Instagram to the #1 App on the iTunes App store for the first time in two years. Instagram is “a fast, beautiful and fun way to share your photos with friends and family” – online commentator, Om Malik describes it as “a platform built on emotion. It created not a social network, but instead built a beautiful social platform of shared experiences. Facebook and Instagram are two distinct companies with two distinct personalities. Instagram has what Facebook craves – a passionate community.”

I don’t have Instagram myself (due to my incompetent Blackberry Curve!) but I know that the App allows you to take photos of everyday objects/ events, beautify them to your emotion and portray your interpretation of the photo. Following this addictive phenomenon, photo sharing has plunged to the top end of social activity.

While you may think that Facebook couldn’t get any larger, Mark Zuckerberg stated that he acquired Instagram in order to encourage more mobile engagement with the social media site. Instagram users can only share their photos through their mobile, whereas Facebook is much more accessible as a whole through the computer.

In addition to this, Facebook will gain 27 million users and acquire Instagram’s six talented employees. Kevin Systrom was once offered a job by Mark Zuckerberg in 2004 before Facebook became such a big hit. Now he can revel in a hefty $400 million and still work for the world’s largest networking giant a few years later than planned. With these new 27 million users and 6 of the most technically talented employees, it could be an interest ride for Facebook. One thing that could be an obstacle is that fact that Facebook still hasn’t found any proven ways to successfully integrate mobile adverts for the site. So this substantial investment may seem risky if it doesn’t provide a return on investment through the increase in paying advertisements.

Did Facebook buy the App so that its competitors couldn’t do so? Who knows – Twitter were also secretly bidding for Instagram so it may have been inevitable that it was bought out. Did Instagram sell too soon? A lot of online commentators appreciate it’s differentiation to Facebook and Twitter and think it could have turned into a successful social networking site in its own right. However, in my opinion, it’s a model could be copied easily. The photo sharing boom may also slow down, with an increase on – for example – music sharing. This is how Facebook evolved from a mass in simple text statuses into a vast amount of photo shares.

Maybe DrawSomething could be next for Facebook?

What does it mean for us PRs and Marketers?

If Facebook is buying into soul then this can show true qualitative market data for businesses – it will help them learn how they can visually appeal to their audience and understand what effects/styles attract them best. By using instagram for uploading pictures of products, for example, its beautifications can add emotion and meaning to the photo – engaging with the audience and boosting that emotional appeal of a brand or product.

Instead of distributing press releases, or tweets with hyperlinks that barely get a look into, what could be more effective is the use of visual and photography. Remember the saying “a picture tells a thousand words?” – it would be effortless for the respondent to engage with, and if they like it because it represents their emotions then they’re likely to share this too, reaching out to a wider community.

Whatever happens on this train journey, marketers and PRs have expanded their online reach with no extra effort due to Mark Zuckerberg – this will only prove effective if they can maintain Instagram’s authenticity that its users love so much.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together” Mark Zuckerberg.

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