Instagram, the first step in a new strategy for Facebook?
Facebook’s acquisition of Instagram is a good buy. Yes, it’s a defensive buy, but in the purchase, Facebook secures both tactical and strategic benefits.
Facebook’s success to date has been anchored in the desktop. For many Web users, Facebook has become their OS. As Facebook has integrated everything from YouTube to Spotify and NetFlix into the feed, it’s become the way people not only discover but increasingly experience content on their computers. But mobile doesn’t work this way. On phones and tablets, web traffic is predominantly served by apps, not traditional browsers. Further, the paradigm for apps is anchored in specific tasks, functions or games, not meta all-in-one experiences.
The future of the web is mobile. Mobile devices like smartphones and tablets alreadyoutnumber desktops in the number of people they connect to the Internet. And while sales of personal computers remain slow, mobile device sales tell a different story of rampant growth. As the Web shifts to mobile, Facebook’s market and mindshare is increasingly under-threat from brilliant task-specific apps. And with every smartphone having a camera, the battle-ground for photo sharing, in particular, is very different to that of the browser. For all Flickr’s loyalty amongst prosumer photographers, it is weak on sharing and weak on mobile, and as a consequence has been eclipsed in the world it once ruled.
Instagram is number 1 for mobile photo-sharing. It is the most popular free photo app in the App Store. Since launching on Android last week, Instagram is the third most popular app (behind Google maps and voice search). Facebook is eighth. What Instagram has brought to photo sharing is a beautifully simple user experience, something Facebook has never really nailed. Further, Instagram’s filters transform ordinary photos into attractive social content. In doing so, Instagram has found a way to make user-generated content something great. Something Facebook has also sought to do recently with the introduction of Timelines.
Instagram could be Facebook’s YouTube. In 2006 Google paid $1.6B for the number 1 video-sharing site, which like Instagram wasn’t profitable (and still may not be). In the purchase, Google was able to defend against video search potentially splintering their dominant web search position. Further, as Google fights Facebook for total share of web traffic, YouTube is a key destination in keeping people on Google’s advertising network.
Any suggestion that Facebook is in it for Instagram’s 30 million users and photo data misses the point. Facebook’s users already upload 100 million geo-tagged photos a day, and certainly almost all Instagram users are Facebook users. Facebook-onomics not only means they can comfortably afford Instagram’s $1B price-tag, but they can also make the app much more useful for Instagram users and Facebook’s advertisers. Better content drives greater engagement and that’s Facebook’s number one metric. By simply improving the way Instagram photos appear in the Facebook feed, Instagram users will win new followers, and Facebook more Likes and Shares.
Facebook’s understanding of the social graph will also enable better recommendations of Instagram users to follow, something Instagram does poorly at present. Add Instagram photos as a tab on your Timeline and Instagram users get the web-presence they’ve always lacked, while Facebook secures greater lock-in. And with a stronger Instragram, Facebook is well guarded from others splintering core parts of its offer.
Is the purchase of Instagram Facebook’s first step away from a monolithic all-in-one experience, to a more mobile-driven, open and task-specific ecosystem? I hope so. And in the Google-YouTube story, Facebook has a role-model for an acquisition that not only bolstered both brands and gave a rising-star the resources it needed to fulfill it’s potential, but also set the standard for how we experience the web today.
Photo by the author
