Facebook bought Instagram. But why?

We can see the case in this way. Facebook is not in business for more users; they already have enough to keep their profitability level high. Instagram on the other hand was thriving and boasting about the huge user base. They claim to reach a 100 billion user base soon. Nevertheless, Instagram is making a lot less revenue than FB is.

There are three reasons I see, why Facebook ventured into buying Instagram.

1)     Competition: Photo sharing and editing them while doing so is the latest trend. Text content is becoming more and more extinct and picture content is gaining attention. No doubt Instagram will make this photo sharing experience better for Facebook, hence the move.

2)     Instant upload: This year, experts forecast heavy growth in use of SNS via mobile phones. When you are moving you get to capture pictures and upload them instantly. This activity is more appealing to people than clicking pictures of the vacation they have been to and upload a week later from their homes.

3)     More people: Yes, they do not need more users to catch attention but who doesn’t want to be more popular and spread their wings? It seems Facebook wishes to capture a user base that might have not been very active on Facebook. With Instagram clubbing into Facebook, they got to come to the host more often.

Strategically, Facebook is clear what it wants from this acquisition. What we need to wait and watch is that whether Instagram meets the fate of other inactive Facebook applications or rises even more with time and this tie up.

Image: Google images

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