If you’re looking for confirmation that the world has gone mobile, then Facebook’s $1 billion purchase of Instagram should help point you in the right direction.
Given that Instagram isn’t yet turning a profit, Mark Zuckerberg’s decision to drop $1 billion on buying the company isn’t based on seeking an immediate return on his investment. But it does show that Facebook is serious about meeting its biggest challenge to date: its failure to monetize the fact that more than half of its 845 million members log into Facebook on a mobile device.
“Facebook may have had a strong product (photo-sharing on the Web),” explains Business Insider’s Nicholas Carlson, “but it also had a gaping weakness (photo-sharing on mobile), that Instagram was exploiting”.
Instagram is fun. It lets people add quirky effects to their smartphone photos and share them with friends. Incredibly quickly, it has developed an almost cultlike following, with 30 million users who upload more than five million photos a day.
As The Guardian newspaper showed, Instagram allows you to give new meanings to your photos. By adding Instagram’s “Toaster filter”, the warmth of the special relationship between the United States and Great Britain took on a new glow in this photo of George W Bush and Tony Blair.
But are quirky photos worth $1billion?
It is if your main competitor happens to be Google, who are a strong player in the mobile space with the Android operating system and who also happen to own YouTube. Facebook originally took off in the desktop era as people played at being farmers during work hours. By adding Instagram, the social media giant has, in a single shutter click, made its service more appealing on smartphones.
As Rebecca Lieb, an analyst at the Altimeter Group told the New York Times, “it’s easier to update Facebook when you’re on the go with a snapshot rather than with text.”
Devoted users of Instagram, like David Meerman Scott, are already concerned about the implications for Instagram following the Facebook purchase. One of his concerns is that:
“I’m also seeing a future where we are forced into the Facebook mobile app to use Instagram.”
Perhaps Instagram will indeed disappear behind Facebook’s walled garden, but one thing is already clear: A $1 billion payment for a single mobile app still to make a cent is the clearest picture yet that the future is mobile-centric.
BLOGGER: JEFF BARAK