Why Facebook Bought Instagram

Apr 11 2012 @ 7:44pm

Photo

by Zack Beauchamp

Facebook came in for heavy criticism after its $1 billion purchase. Om Malik explores one possible motivation behind the move:

Facebook was scared shitless and knew that for first time in its life it arguably had a competitor that could not only eat its lunch, but also destroy its future prospects. Why? Because Facebook is essentially about photos, and Instagram had found and attacked Facebook’s achilles heel — mobile photo sharing.

Kelli B. Grant proposes a second theory:

[Facebook] gets a bigger foothold on phones via the Instagram app, which could allow it to gain more access to the data on your device…Experts said photographs on Facebook could be among the more valuable data on that scale. “That’s the holy grail,” says Scott Steinberg, chief executive of business consulting firm TechSavvy.

“It tells them exactly where you are, and what activities you’re interested in.” Marketers can analyze the photo content itself for basic details like presence of children or pets as well as specifics like friends you tagged and what keywords you included in the caption, he says. That tells them what ads to send your way, improving the chances that you’ll click through. So, post a slew of candids of the baby and ads could start popping up for diapers. Repeatedly tag yourself in vacation photos, and airline credit card pitches may come your way.

Paul Ford zooms out:

[I]t is a critical choice of any adult as to where they will perform their free labor. Tens of millions of people made a decision to spend their time with the simple, mobile photo-sharing application that was not Facebook because they liked its subtle interface and little filters. And so Facebook bought the thing that is hardest to fake. It bought sincerity.

(Photo by Zoe, lending her Instagram account to the Dish cause.)