Why Facebook’s Purchase of Instagram Is a Big Deal

If you’ve opened up your browser within the past 48 hours you probably already know that Facebook just recently purchased Instagram, the mobile photo-sharing social network, for $1 billion dollars. That’s a lot of money. But, for a company that is rumored (and projected) to have roughly $4 billion in revenue through the next year, and growing, that $1 billion might only seem like a drop in the bucket. Chump change, really.

Still, it was a huge purchase for Facebook, and it took the tech world by storm, surprising even the biggest Facebook advocates. Just what, exactly, are Facebook’s plans with this purchase?

Mobile: The New Frontier

For one, it marks just another huge step for Facebook in the mobile market. Facebook has recently redesigned its mobile applications for Android and iOS, and now its looking into ways to further improve those applications and attract more users.

And though Facebook has just recently begun to offer Sponsored Stories to mobile users — that is, stories that advertisers pay for that are then included into mobile users’ streams — its mobile monetization has been, at best, sparse.

Facebook hopes that with its recent acquisition of Instagram, it can start making greater strides in monetizing the mobile market. With all of the information that Facebook will now have access to because of their Instagram purchase — the millions upon millions of photos that Instagram has — Facebook will now be able to drive more mobile users towards their website and vice-versa. Because Facebook primarily makes most of their money off of ad placements from the desktop version of Facebook, being able to gain 30 million mobile users, as it just did with the purchase of Instagram, is a huge, important step for them in the world of mobile marketing.

Increasing Facebook’s Threshold on Our Lives

As Facebook recently indicated with their rollout of Timeline, and probably something that Facebook has had in mind for years, the social networking site wants to become part of our lives. What I mean is that Facebook wants individuals to essentially turn to the service for all of their status-updating, video-sharing, and photo-sharing needs.

With Facebook’s purchase of Instagram, they just bought a huge portion of that. Since photo-sharing is easily the most social sharing utility currently available, Facebook wanted to make sure that it had a significant edge in that regard. In purchasing Instagram, they’ve purchased not only the 30 million users that Instagram currently has, but also the millions upon millions of photos that its users have taken over the years.

In Layman’s terms, Facebook just purchased a small, but rather significant chunk of our social-sharing lives.

Enhancing the Photo Sharing Experience

But Facebook didn’t simply purchase Instagram for its users and photos — it also purchased Instagram for its easy to use, but robust photo tools. Part of the allure behind using the Instagram application is — beyond the ability to share photos — the filters that it allows you to apply to photos, making even photos from some of the not-so-greatest cameras appear great.

Facebook, as it continues to make its mobile UI more robust and inviting for users, will undoubtedly want to roll these features into their mobile applications in order to make them, well, fun again.

The Future 

An already huge social network just got, well, huger, and for good reason. Facebook is looking for ways to expand well beyond simply the desktop and the solution, for them at least, was to simply buy Instagram.

Their next step will possibly be to wrap many of Instagram’s features into their own products, and begin attracting more users (and therefore revenu) towards those products.

But right now, Facebook has a fresh hole in their pocket following the acquisition of Instagram. We’ll see if it pays off.



Source: MSM DesignZ, Inc. is a Westchester social media company based in NY specializing in advertising, web and graphic design, and SEO.