It’s remarkable to think that only a few years ago, critics were calling Mark Zuckerberg crazy for turning down billion-dollar offers for Facebook. Now Zuck is the one doling out the billion-dollar offers—and some are still calling him crazy.
Their minds might change when Instagram shows up in their Timelines.
On Monday, the social network announced plans to acquire photo-sharing startup Instagram for a reported $1 billion. What’s Facebook getting for that price? For one, in acquiring one of the world’s fast-growing social networks, it’s staving off competition while boosting its user base. It’s also gaining a talented team of engineers and a strong foothold in mobile engagement. But the most important part of the acquisition involves tying in a third-party product that makes Facebook Timeline irresistible to a lot more users.
In many ways, Instagram is already a mobile version of Timeline. Photos are arranged in reverse chronological order. The platform is designed for discriminating shutterbugs: Instagram is all about that one picture you snapped, took time to apply a filter to, and shared with your close circle of friends. If Facebook is designed for sharing whole albums of a family member’s wedding ceremony, then Instagram is all about that one photo you took of your sister and her new husband, before sending them off on their honeymoon. It’s more intimate and emotional, curated and crafted—the exact moments Facebook wants to promote on Timeline.
To be sure, Facebook still wants you to share entire albums of photographs. But it can take advantage of Instagram’s graph to get that one gorgeous photograph—which is timestamped and often geolocated—to promote on the front page.
In that sense, Instagram can help keep Facebook’s Timelines fresh. And not just for users but brands too. So far, brands such as Hulu, Spotify, and Ford have stretched their Timelines as far back in the past as they’ll realistically (or unrealistically) go. But Facebook has to keep them on the service going forward, and Instagram could be the key.
Kevin Systrom has made it clear in conversations that he’s had no interest in serving up traditional or expected ads that co-opt the platform. He was searching for ways brands could organically enhance Instagram. Starbucks and CNN, for example, were on Instagram almost only to give a behind-the-scenes look at their operations. Their feeds weren’t tied directly to any advertising in the traditional sense.
Systrom also avoided any consideration of advertising early on. He wanted the network to scale dramatically before monetizing it, and didn’t want to dilute Instagram’s brand prematurely, especially with such limited real estate on smartphone screens.
Facebook solves these two issues for Instagram. On the one hand, Facebook can leverage its existing relationship with agencies and brands like AmEx to make Instagram a viable platform. On the other hands, it can take advantage of Instagram’s mobile engagement to push users to follow brands on Facebook proper.
That boosted engagement will be valuable to Facebook’s bottom line, and something Systrom presciently hinted at last year.
"I think a lot of people see Instagram as an iPhone utility, something you use to filter your photo, and save it to your library, and maybe [share] with friends," Systrom said. "What’s interesting to me is transitioning from that mindset into, 'Wow, this is actually a really strong social network, something that I can spend hours inside.' The next version of the app [is] a step-change in that direction, much as when Facebook decided to not just be available at colleges anymore, and branched out beyond that."