Facebook Buys Instagram

On April 9, Facebook announced a deal made with Instagram. Instagram agreed to be purchased by the social network for $1 billion, which will happen late in this quarter. The mobile photo-sharing app, Instagram, was recently valued at $500 million. So why did Facebook pay so much?

There has been a lot of speculation surrounding this pricey purchase. Instagram is a huge success and has a quickly growing user base of die-hard fans. But does it make money? And how will it help Facebook?

Instagram’s simple, direct nature embodies the features Facebook lacks. Instagram is a mobile success and users love it. While people certainly use Facebook on their smartphones, mobile facebooking does not evoke the same joy that millions of users achieve by snapping a photo with Instagram. Facebook is part of the daily routine. Instagram represents something a bit more creative and spontaneous. Photo effects and filters add a whimsical charm to every-day happenings. Instagram brings another layer to the experience of being an impromptu photographer.

Perhaps Facebook saw Instagram as a rising competitor. Or, Facebook could have recognized the appeal of the photo-sharing app to other social networking sites, i.e. Google +. Instagram currently does not have a Google+ share button and it seems like it will not be adding one anytime soon.

When it comes down to it, photos are key to Facebook. Kara Swisher of allthingsD.com explains just how important they are:

Photos are what allowed Facebook to grow so quickly and what made it more than just a blue sea of text and links to consumers. Its new Timeline depends on big, pretty photos, and Facebook even recently announced that it would allow full-screen viewing of high-resolution photos on its Web site, a pricey endeavor.

Over 250 million photos are uploaded to Facebook every day. And Facebook owns them all! Add Instagram to this equation (photos originating from smartphones, another technology on the rise) and the results are pretty powerful.

When the news first broke that Facebook bought Instagram, there was an outcry from Instagram users promising to delete their accounts. Despite this outcry, Instagram catapulted to the top spot in the App Store for the first time ever. This social media marriage has spread awareness for Instagram. Regardless of the motive behind Facebook’s acquisition, it’s clear that social sharing will largely remain in the hands of Facebook.