With the $1 Billion purchase, will it remain free or be caged?
The really big news this week is the purchase of Instagram by Facebook for what could be considered a huge premium. That is because the revenue being posted by the company is non-existent and brings back memories of when Google purchased YouTube. But that was a long time ago and much has changed in this Web World that we all belong to. The numbers for Instagram have been what one would consider to be off the charts. With the launch of their Android app, they achieved 5 million downloads in 6 days, which is big numbers. All from company which has no profits to show.
Instagram is enjoying the biggest week in its existence. The company, already riding high on its iOS success, launched its Android app and captured 1 million downloads in its first day and unless you live under a rock, you will know that yesterday, Facebook came in and bought the company for a cool $1 billion.
Will Instragam Remain Independent As Microsoft Did With Skype?
This is the big question. Facebook does not have a history of purchasing companies and then leaving them alone. They do the exact opposite and integrate all the functionality and features inside their walled garden. This requires you to be a “guest” of Facebook and log on to gain access. This is the more likely situation which we can expect to see on the purchase. In the Blog post from Mark Zuckerberg, there are no guarantees being made with what the future may hold for the extremely popular service.
For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.
Facebook has spent a lot of time and effort for sharing photos and with the Instagram team, they are going to be offering even better experiences by further integrating those features into Facebook. Instagram as it stands today may not go away, but Facebook is going to get the lion’s share of the quality improvements. There is nothing in the blog which clearly states that Instagram has a long term future or not. If other sites start leveraging Instagram for their use, Facebook is going to be quick to stop that from happening. And with that, Instagram as we now it today may go away.
This large purchase of a company is a strange one as Facebook is on the verge of their IPO in the next few weeks and since there is no revenue for Instagram, Facebook will not get immediate benefits from the purchase. As a result, this has caused some to question whether there is a Tech Bubble here and the future implications are that is is one. The picture industry is still recovering with the bankruptcy of Kodak and they were a long established company. Instagram is a very young company which is still exceeding expenses over revenues and it does not look like that will be changing in the immediate future.
Given that YouTube has been a heavy use with computers and tablets, Instagram is a completely different model. Its best usage is with a smart phone and there in it is much different than YouTube and make the comparisons far different. Assuming that Instagram remains as highly popular as it currently is, the bigger question is what is Facebook going to do with it remains as an unknown. Given that the primary focus of Instagram is for mobile devices, it could be one area which Facebook wants to improve their processes on. Time will tell as to exactly what Facebook has in store for this most recent acquisition.
Given past history with Facebook and their walled garden mind set, it is more than likely Instagram for the future will be included inside of Facebook. What do you think?