So the news of the day has to be that Facebook bought Instagram for one billion dollars. Say that in a Dr. Evil voice and let that set in a bit: one beeeeeeeelion dollars. For a thing that doesn’t even really have a moneymaking plan. Really?
Ok, Instagram is kind of cool. I use it. Look at me being trendy with pictures from my iPhone made to look like old timey and all that. Let’s dissect this, though.
Instagram has no revenue model whatsoever. The app is free. The social aspect of it is free. There are no ads in the app or anything. I’m pretty sure that if they started changing for the app or plastered it with ads, people would just leave it for something else. How do you figure out that this is worth a billion?
Theres also the question of base. Aren’t most of the people using Instagram also on Facebook already? An awful lot of people just end up pushing their Instagram pics to their walls as soon as they take them. You’re paying for an awful lot of duplication. Plus, there are a lot of users who like the walled garden approach that Instagram offers. Hell, a lot of these people were pissed that Android users get to be a part of the community, which was iPhone only until recently. They’re not going to want to be part of the Facebook mother ship.
Also, you would have to think that eventually Facebook is going to want to make the best parts of Instagram be part of the Facebook app itself. Take a picture with the Facebook app, put a fun filter on it, post it on your wall. It’s what a lot of people using Instagram do already isn’t it? What good is an app that’s not integrated into Facebook and lets you share with a lot of other services, including twitter and foursquare, which Team Zuckerberg would love to wipe out? I know it was said that Facebook would let Instagram continue as is, but face it: talk is cheap. I think it’s only a matter of time, and it’s the move that best fits Facebook’s strategy of being the timeline of your life.
So, long story short, Facebook bought a web service with no revenue model for a billion dollars. What the fuck is the world coming to?