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Facebook buys Instagram! Do you know why?

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April 20, 2012

Facebook has added yet another feather to its cap and this time it’s the Instagram app. It is a free app initially developed for iPhone users to share photos and videos. It has about 17 filters and colour balance to allow users make changes before it is uploaded. It’s quite amazing that Instagram has grown from zero to a drastic $1 billion in just 18 months of time with just about 13 employees in its credit.

Recent reports highlight that the co-founders of Instagram, Kevin Systrom and Mike Krieger actually wanted $2billion for their app, but after three days of negotiation, it was finally decided for $1billion.

But, what exactly compelled Facebook to buy Instagram for this staggering amount is still a BIG question. Let’s dig deep to find more about this, here in this article.
Instagram Co Founders

Credit source: http://www.dailymail.co.uk/

Kevin Systrom (Right) and Mike Krieger, Instagram co-founders

 Highlighting features of Instagram

Unlimited and free download

  • Availability of free custom designed borders and filters
  • Sharing feature on Facebook, Tumblr, Flickr, Posterous and Foursquare
  • Front and back camera support on iPhone4
  • Full fledged interaction with friends and family on the basis of giving Likes and comments
  • Simple though embellished
  • Allows you to add up followers
  • Inclusion of hash tags to help discover photos and friends
  • Was often featured in Apple’s App Store
  • Mark Zuckerberg considers Instagram to be beyond Facebook because of its connectivity to other services
  • Ability to follow and have followers apart from Facebook account
  • Highly competitive social networking app
  • Now available not only to iPhone and Android users but also to more than 845 million Facebook users

Reasons that led Facebook to acquire Instagram

Number of users

Instagram has about 30 million users to its credit now and has got the potential to reach upto 100 million users very easily. This app added up one million active users to its account just in a day after it was opened for Android users. At this point of time, Facebook can use Instagram to produce more users rather than generating more revenue.



Mobility is another factor that forced Facebook to acquire Instagram in to it. As users are largely mobile oriented and focussed to mobile uploading, Facebook never missed to take this opportunity. Facebook already has a number of mobile users and hence it is necessary for it to concentrate on making more money. Although, Facebook has been trying to increase its revenue out of Facebook mobile products, nothing much has been achieved so far. Reports say that about 425 million users became active on mobile phones every day. It is thus evident that mobile apps are increasing its number on a daily basis.

The main objective of building Instagram was to develop users for it and to serve them with ads. This is of course the objective of all app developers as well. But the question that still remains is how long Facebook will take to cover up $1 billion as nobody still has managed to make enough money out of mobile ads. Another reason could also be regarding the immense popularity Instagram has gained amongst its users despite Facebook having its mobile photo-sharing app for years.


Existing competition prevailing in the market could also be another reason. It’s mainly because several photo filter apps that were used only for iPhone were later being replaced with its photo filtering capabilities on Android. Also, with the existence of several other photo sharing platforms available, one needs to think a lot about its rivals as well.


Data is yet another factor that has forced Facebook to acquire Instagram. In fact, Facebook and Instagram both have almost the same number of upload in a day, of about 100 million photos upload. Hence, it is a valid reason why Facebook has turned towards Instagram to increase its popularity. However, it’s now clear that Instagram is on the safer side from Google and Twitter (as were once its competitors).

Although several reasons contribute to the acquisition of Instagram by Facebook, the impact Instagram has created had already become a threat to the giant social network. Moreover, Facebook has been the largest photo sharing network but the inclusion of Instagram has an added advantage as it not only allows sharing of photos and videos with Facebook users but also with users in other services. This is indeed a great advantage!
Mark Zuckerberg

Mark Zuckerberg, Facebook Founder and CEO

But, will Instagram users quit totally to join in Facebook?

Instagram that was initially built for iPhone was extended to Android users just a couple of days back. And now with Facebook acquiring Instagram, many users are already planning to quit from Instagram to enjoy using this photo sharing app on their Facebook account. However, it is understood that Mark Zuckerberg, Facebook Founder and CEO has assured Instagram that it will remain independent under Facebook.

It is thus clear that any app built exclusively to serve a purpose attract user’s interest if it can prove its worthiness. Hence, App developers need to concentrate on factors that benefit end users to make it a huge success.

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