Before I start reading everyone else’s blog (Danny Brown’s just arrived in the box) post about Instagram to sway my opinion, I’m going to just say right now in a timely way… this is all in a day’s work, right?
- Companies buy competitors to enhance offerings
- They buy sexy upstarts to be sexier themselves
- They buy companies to add more customers
- They buy companies to play in a sector they’re not
- They buy companies just to recruit that company’s CEO (see below)
- They buy companies that have NO revenue just because they can!
Today’s Wall Street Journal tells it like it is:
- Instagram has ZERO, that’s a big, fat ZERO, revenue, yet it was bought for $1 billion in a CEO-to-CEO deal that did not cross the t’s or dot all the I’s.
- Facebook says it will essentially leave Instagram independent to do what it does best (allow its 30 million users to snap images and post on various Interwebz simultaneously).
- Facebook bought Gowalla only because it wanted that company’s CEO to come work for Facebook (did you know that?) and Gowalla ceased to exist last winter.
- Facebook has not jumped on the mobile app bandwagon quickly enough; in fact, its ~380 million users aren’t loving or using Facebook on mobile the way Instragram users HAVE to use Instagram – it’s ONLY a mobile app.
- Instagram users are nervous there will be charges for usage or ads that litter the landscape of the app or integration into Facebook that will forever alter the core application.
So, let me repeat something that still confounds me…Instagram has NO revenue, but it recently closed an angel investor deal just prior to its acquisition by Facebook. So, the little success story from two guys in a garage (well, really from Stanford), became a little darling much like the dot.com era where venture caps were throwing money at any dot.com that launched to see what stuck. We all know the end to that story.
So, did Facebook spend $1 billion (peanuts to them) to buy a company with zero revenue and 30 million users (many who’ve said they loved Instagram for its anti-Facebook orientation) who may drop off like flies or may not, to integrate into its own platform and ultimately knock down a potential competitor?
That’s a mouth full, for sure, and only time will tell.
I, for one, am staying with Instagram; I have never loved a mobile app so sweet, simple and launch-and-play as I have Instagram. But, let me state…after my beloved TweetDeck was taken over by Twitter and we users began to experience the pain and left in droves to HootSuite…I’m holding my breath.
Where will I go next if Facebook alters Instagram so drastically that we feel the difference? C’mon app developers, please launch the next big SnapIt, wouldja? (There, I just named your new mobile photo app, Ladies.)
And, on a final note…Instagram is FREE. It doesn’t cost $.99 to launch like many apps now do; why not? Isn’t that a paltry source of some revenue? About 30 million users at a buck each minus a cut to iTunes app store; well, that’s some source of income, right? What possesses app developers not to build in 99 cents out of the gate to at least cover some overhead?
So, what about you, Instagrammers? You comin’ or goin’?
Credit: Jayme Soulati via iPhone 4S to Instagram
Staying with a capital S. I’m already tired from all the moaning minnies about the product THEY PAY NOTHING TO USE is a sellout…. grow up, puh-lease.
Michael Schechter covers it perfectly here:
https://bettermess.com/stop-crying-about-free-services/
PS – my post is just a pretty picture, no major revelations. 🙂
@DannyBrown Michael Schechter I was just going to see if the link I grabbed from your Feedburner to my in box worked here or I I needed to update with a true blog link. So, thanks for letting me know!
That said…INDEED! There are so many who expect free these days; look at JC Penney struggling to remove the coupon culture from its establishment. Heck, I’d pay a subscription fee for this app, it’s so good.
Now we wait to see how FB will screw it up so we’re forced to consider other platforms. Wanna collaborate on SnapIt? Heh. Great seeing you, Friend!
@DannyBrown Michael Schechter I second Danny on this, and take it a step further. I don’t even suggest people “moan” about stuff they pay for. Add well-crafted, constructive criticism, and if you can’t do that yet, get to practicing 🙂
I also had a post on my old blog called “Theres No Such Thing As Selling Out”
I don’t use instagram, but I find all the speculation funny.
The fantastic hoard of options available to both facebook and instagram from here is immense.
Even the experience of saying “facebook bought my company” – speaks volumes and is a launchpad for all kinds of collaboration.
@Jason Fonceca You’re right! But, if I know you the little I know you, then I hope you will engage/indulge in Instagram (depending on whether you’re using a smartphone, or not, as that’s the key). I have more fun snapping instant, in the moment content, and I love it. Have a great day, Jason!
@Soulati | B2B Social Media Marketing It feels likely, it’s the realm of celebs right? (And I have a Samsung Galaxy Android Phone :D)
@Jason Fonceca Oh, I think, then, that you must try it! It’s blog fodder for goodness sake! And, Twitter stuff, too!
Not a user at present as to still having an incredibly dumb phone, but I’ll certainly try it when I upgrade. One thong for sure is that there are nine very happy people at Instagram!
@Brad_Lovett That’s hilarious, Brad!! Well, I guess 30 million other people use smartphones! See you in a few weeks, right?
There already was a $1.99 version of Instagram. It was called Hipstmatic. There are also several other paid options including $.99 options that people ignored. People abandoned them in favor of a free option. Hell people don’t even remember that Hipstamatic was 2010’s iPhone App of the Year according to Apple. $.99 cents would never have seen 30M users. And frankly, when you do the math, not charging $.99 seemed to work out pretty well for the guys at Instagram. I doubt FB will roll this one up (I could easily be wrong), but they purchased Instagram for the passion behind the user base as much as they did the product or the team. IG is something FB isn’t… (or wasn’t) They’re Likable and that’s likely just as valuable to FB as the mobile picture sharing aspects (where IG was eating their lunch).
@MSchechter There it is; passion for the brand or product passion as we are the product! Time will tell!
I just joined Instagram and I have no intention of leaving, at least not now. It is free and I get what I pay for. Thus far I haven’t any issues with it and if I do I have the choice to continue or discontinue using it.
@TheJackB Exactly! Easy peazy lemon squeezy, right?
@Soulati | B2B Social Media Marketing @TheJackB Love that phrase lol 🙂
This makes me WANT to use Instagram. How’s that for cream in your coffee this morning, Jayme? 😉 I hope Facebook bought Instagram to make for a seamless experience between the two platforms. It’d be a wise move if they did. I’m glad your post was the first one I read on the acquisition!
@New England Multimedia Gosh darnit; we bloggers should get paid for all the ahem, FREE, PR we give, eh? Shoot…but, you can’t go wrong, Michelle! Promise on this!
Phew, I didn’t know Gowalla was gone! Jayme thank you for bringing me up to speed. I’ve been so behind.
As for charging for Instagram – since there’s a way around paying for apps on Android (or so I hear), most choose to go the ads-based-revenue-route (those hyphens are just for you) so I’m going to download it now and see what’s what. Then I can tell you if I’m leaving.
Wait, don’t leave! No reason; it’s a great app, and I have seen you use it on FB…stay put and tuned; you’ll know when it’s time to run!
@jennwhinnem I answered you on the dashboard; sorry it didn’t show up!
I said, stay, don’t go! There’s no reason to go until we see any changes…I see you using Instagram all the time; no reason to move along until there’s a reason to move along. You’ll know as soon as we do!