Instagram co-founder and CEO Kevin Systrom apparently asked $2billion for his photo-sharing app. An application with 30 million (obsessive) users, but yeilds no profit. I can only think of one justification for this price tag: The number of users is about to skyrocket with Instagram’s long awaited entrance into the Android market. Within the next 30 days, Instagram is projected to double their userbase. They’re going to need a bigger boat.
Systrom has been taking lessons from the best bargainers around. “I’d like $2b for Instagram, but I’m willing to go as low as $1b.” To which Mark Zuckerberg, CEO of Facebook, got out his checkbook.
If you’re not on the Instagram band-wagon yet, it may be time to check it out before it changes, and before Facebook squeezes the life out of its unique design. Instagram makes it easy to take pictures and pick between different editing tools and 11 different filters to give the photo a unique “polaroid” effect. You can snap a photo, use an old one, and share them on Facebook, Twitter, and Instagram itself, which has quickly become its own social network. So you can see why the app is all the craze with hipsters and smart-phone enthusiasts, who are now all one step closer to being professional photographers.
So what makes this free app worth $1b to the Facebook team? How could Zuckerberg justify spending such a hefty amount on a photo-ap that yeilds literally no revenue? It is because Zuckerberg saw that Instagram is an easy, clean, and seamless way to share photos. His Facebook ap for Iphone and Android is busy and clunky. There is no easy way to share specifically photos on Facebook.
What I wanted to know, why didn’t Facebook just make a similar photo ap? With their 3000 tech employees all over the country, wouldn’t it have been easier and cheaper to make a new one? Yes, it would have, but Zuckerberg doesn’t want to compete with startups. He wants to scoop up the competition.
The truth is, Instagram is not worth the $1b dollar asking price. But the monopolizing of the term “share”, and what it means to share with friends, is. Facebook needs to dominate their social networking arena, and make sure there is no better alternative. Zuckerberg wants to own the concept of sharing.
For those Instagram fans out there who are worried that the corporate tentacles of Facebook will smother the simple app, don’t fret. Zuckerberg has said he doesn’t want to change any layout or functions of Instagram. I am reminded of the popular music site Spotify. Once bought by Facebook, the program is now flooded with overwhelming text like “Linzi and 162 friends are using Spotify”, and all your friends on Facebook live feed seeing what music you are listening to. I sincerely hope that Instagram doesn’t change. We don’t need it to be intertwined with Facebook in the same way. What I would tell Zuckerberg:
Don’t fix what isn’t broken.
We will just have to see what happens in the future, Zuckerberg has been known to change his mind.