Why Buy Instagram? Facebook Had No Other Choice.

Facebook’s purchase of Instagram, while shocking at a $1 billion dollar figure, should surprise no one. Facebook is fueled by content, and in the social world content is largely comprised of photographs. Instagram, with a user base of 50 million people, went right for Facebook’s Achilles heel (mobile) when it seized the mobile photo market.

Personally, I don’t know if Instagram is truly worth $1 billion dollars, but if Facebook is worth $80 Billion then Instagram is worth well more than a mere billion to Facebook.

What is most interesting about this exorbitant purchase is what it tells us about Facebook. When the mobile app market began to explode, we saw an influx of innovation that resulted in an expansion of sharable content, along side a rethinking in what constituted social content. Gaming, location check-in’s, mobile video and photography began to flood our feeds.

We learned that Facebook can’t simply replicate a service and takeout the competition. Foursquare debunked this notion when Facebook Places launched and subsequently prospered. Foursquare noted that Facebook Places merely exposed more users to the concept of “checking-in” which resulted in a massive boost in their user base. Why you might ask? Simply put, Foursquare does it better.

Facebook’s biggest problem is its inability to figure out mobile. The fact remains that Facebook’s mobile app is packed with features resulting in a navigational nightmare. Accessing a single feature requires the user to jump through several hoops. My use of Instagram and Foursquare started as a matter of convenience.

It has been reported by various sources that Path, an app that allows you to keep a social journal (posting various types of media) is a source of concern for Facebook., as it should. Path is simple, elegant and easy.

I don’t have Facebook’s solution but I think the answer can be found through a multi-app strategy. Facebook is a platform, not a single application. If Facebook is looking to avoid several billion-dollar acquisitions – which doesn’t appear to be Mark Zuckerberg’s style – it had better change course, because this titanic platform has a huge hole in its hull and it’s shaped like a smart phone.

  • http://www.facebook.com/jonspooner Jonathan Spooner

    Why do they have to purchase these app companies altogether? Why not just significantly invest in each promising new mobile app in exchange to FB being integrated more fully?

    If FB is the platform then (hopefully) Instagram will stay on it’s own with more FB integration coming in the future – but I don’t really see Instagram becoming the Places of Photos within facebook.

  • Adam

    The issue comes down to data. Facebook’s big play is it has all this data that it will eventually monetize. Mobile apps collect an incredible amount of data: time of use, location, etc. If people start using other apps and merely push content to Facebook, then Facebook becomes a glorified social reader. It’ll lose all its value to advertisers and investors.