Hopefully for Facebook the ~$250 million in money that vanished thanks to the fickle public market won’t spook founders Kevin Systrom and Mike Krieger. They’ve been working on Instagram without Facebook’s help the last few months, most recently launching a redesign including a Photo Map of geo-located photos.
Meanwhile, Facebook hasn’t been shy about taking product and design cues from Instagram. Facebook launched its standalone Camera app plus changed its web andmobile app news feed to show larger photos and look more like the product formerly known as burbn.
In the end, the deal seemed less about getting a brilliant product team or even the massive 80 million+ Instagram user base, though those are definitely important. Instead at 1%-2% of Facebook’s net worth, either at the time or now, it feels like a wise move to remove the budding competitor from the landscape. There were fears the buy might trigger serious anti-trust problems for Facebook but the FTC is apparently just fine with the acquisition.
While Instagram will certainly help Facebook “understand” mobile, the lean photo sharing startup won’t have much to contribute on the mobile monetization side. That’s an area Wall Street and critics have been hammering Facebook over. But with their combined power, the two companies might be able to figure it out. Facebook could potentially use its massive sales team to sell location- targeted, in-feed ads on Instagram for businesses nearby where users snap photos.
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