Facebook purchased Instagram for $1 billion in its largest acquisition to date on Monday. Previously Facebook’s only purchases have included small acquisitions of less than $100 million. There has been much debate over why Facebook would make such an expensive purchase when they are clearly not desperate for users, and when Instagram’s revenue model does not seem promising.
If Facebook receives the expected $100 billion from its initial public offering believed to take place next month, then their $1 billion purchase of Instagram is nearly pocket change. So it is not a matter of whether Facebook can afford the acquisition or not, but with a weak business model of acquiring users and serving them digital ads, which has yet to prove very profitable, the question to be asked is whether this purchase will pay back the $1 billion in a timely manner.
But with an anticipated $100 billion to spare, the loss of $1 billion is not the end of the world. Rather than a business decision based upon immediate monetary profit, Facebook is strategically buying out their competition. This momentous move for the behemoth of a social network may mark a shift in focus of Facebook’s ambitions and audiences. Instagram, the popular photo-sharing application, holds significant power over the mobile industry, which has been a shortcoming for Facebook in the past. Facebook’s purchase of Instagram is indicative of the social network’s efforts to break into the mobile industry, and the growing importance of mobile applications itself.
Known for its innovation, Facebook’s notable acquisition speaks to the new mobile phase of social networking and digital applications. Instagram was founded two years ago and has quickly become one of the most downloaded applications on the iPhone with more than 30 million users. Instagram users can share photos from their iPhone cameras and add special effects, frames, and filters, to give their photos an extra edge. Just last week Instagram’s expansion into the Android market makes the application even more desirable. Facebook is paying cash and stock for Instagram and hiring about a dozen of the application’s employees, which is quite a deal for what was once a humble start-up.
Instagram fans need not worry as the application will continue to run independently of Facebook, with options to post on other social networks and opt out of posting on Facebook. Only time will tell is this independence will truly hold up, but operating as separate entities has proven successful for many other brands, such as Google and YouTube. Perhaps Facebook will integrate some of Instagram’s easy-to-use mobile photo-sharing software, but other than that the two networks plan to remain independent for now.
[button link=”http://apps.coolappsman.com/apps/instagram-1″ type=”big” newwindow=”yes”] Download Instagram[/button]
will find you. you have to be
proactive in your approach to blog marketing, and start aggressively bring traffic back to you. and this can be done in a variety of ways. if you have the time to do them, then good for you! they will definitely come