A snapshot of the world going mobile

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.

The Guardian newspaper adds a toasty glow to the relationship courtesy of Instagram

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.



  1. Ksheerasagar Akella
    Posted April 10, 2012 at 9:54 am | Permalink

    Instagram was bought mainly for its market share I think. There are many good photo apps out there, but not so many with such a great following.

    Curiously, now that Instagram is launching on the Android, many previously zealous fans have switched apps because they perceive its brand diluted due to Android (Instagram was only available on iOS).

  2. Shahar
    Posted April 10, 2012 at 10:17 am | Permalink

    If you can’t beat them – buy them:
    ” …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” (from Mark Zuckerberg profile on Facebook)

  3. Grigory Burov
    Posted April 10, 2012 at 11:16 am | Permalink

    To monetize on mobile device use you start with simple and progress to more complex, step by step:
    1. figure out that difference between static and mobile is location services
    2. with location services you know the paths and areas people are hanging around, places thay’ve been to and directions they’re going in momentarily
    3. you know friends, foes and likes of users and combined with #2 above you do data mining
    4. sell data in bulk and small to retailes, security agencies, government agencies and to individuals (internet is not a place where you’d expect privacy and being “tagged” with a smartphone people choose to be “spies on themselves”)
    5. start selling partial protection from #4. Being free service it;s not unreasonable
    6. Start selling lists of people buyng #5 protection (people who are hiding) to government agencies
    7. do more data mining, sell the data
    8. repeat

  4. Shrijeet Sharma
    Posted April 11, 2012 at 12:04 am | Permalink

    Its Strange Strange year…Kodak is nearing bankruptcy and Instagram is bought for a one Billion :)..This is new world

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