#InstaFace and #FaceGram: What Does the Facebook Acquisition of Instagram Mean?

#InstaFace and #FaceGram: What Does the Facebook Acquisition of Instagram Mean?I can only imagine members of the Facebook staff’s facial expressions when they first heard about Instagram. True, they did change over time; I tend to imagine that, at first, Facebook laughed at the proposition of a photo-sharing website based on film-look photography. “Didn’t that pass a decade ago? We offer unlimited storage to our users, and what they now want is super high-res photos. As phone cameras get even better, why use Instagram?”

Well, phone cameras didn’t get even better: they stayed the same. iPhone was (and still is, although now not by such a margin) the dominant phone platform. The iPhone 4 only had a 5-megapixel camera, a far cry from most point-and-shoots — not to mention that more and more people were taking photos with their phones. People were learning to better use the technologies that they had, instead of using fancy cameras with megapixels out the wazoo.

So, people stopped caring about tons of storage, or at least left it as an afterthought. What they cared about was the overall look of photos. That is where Instagram excelled; it could turn a blurry, low-resolution pic into a professional-looking photograph in seconds, with only a few swipes and taps.

Some said that this would benefit Facebook for Instagram to drag users away from Flickr and other photo-sharing Web apps. This did not happen, though. I can say personally that I found it much more effective to use Instagram with Twitter than Facebook; you could add hashtags to your photos, and honestly make your photos more social. Instagram provided a huge boost to Twitter’s following.

Facebook’s grins and smirks were giving way to scowls. Instagram praised itself as impartial, serving the users of Facebook itself, Twitter, Tumblr, Posterous, Foursquare, and even partial rival Flickr. In fact, that was part of Instagram’s appeal; everyone and their cat was on Facebook, so new users were “forced” to join, but if you didn’t have a Facebook, you could still join Instagram. Like users who boycott Microsoft or Apple due to some of their missteps, people with resentment against Facebook found refuge in Instagram.

Instagram was slowly digging away at some of Facebook’s users, and therefore ad revenue. More and more people spent a greater chunk of their social networking time on Twitter, Facebook’s biggest rival, and Google+ users who also had Twitter accounts and Instagram accounts could abandon Facebook and still stay connected with their friends.

Facebook’s revenue generation model depends on continued audience engagement. More time spent by users on other sites, or on other mobile apps, equals less revenue for Facebook. So it just makes sense that Facebook would want to acquire the small 13-person startup that gave them so many headaches.

Here’s where Facebook took, arguably, its first misstep in the matter. It acquired Instagram fully for one billion dollars.

Of course, in the eyes of journalists and bloggers, that equates to “Facebook is buying Instagram! Instagram is dead! Facebook bought out Instagram!”

And, the tweetosphere (not to mention Facebook users themselves) responded. Soon, I was greeted with this article on the Yahoo! frontpage: ‘How to delete your Instagram account’ and other Twitter reactions to Facebook’s $1B buy.

To set the record straight, It didn’t. But it sure looks like it did, at least by the way the press portrayed it. Here’s what Instagram CEO Kevin Systrom wrote on the Instagram Blog about the matter:

It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience.

The Instagram app will still be the same one you know and love. You’ll still have all the same people you follow and that follow you. You’ll still be able to share to other social networks. And you’ll still have all the other features that make the app so fun and unique.

We’re psyched to be joining Facebook and are excited to build a better Instagram for everyone.

So, as usual, small startup Instagram was open and clear about what it needed to discuss. But here’s the problem: Google “facebook instagram acquisition press release.” Nothing. Try “instagram press release.” Nothing. Facebook had nothing to say about the matter; no transparency, no consoling the public and rabid blogosphere. Nothing.

And what will happen to the APIs? What about the developers?

This dead silence is not new from Facebook, though, and it’s exactly what worries me (and many others) about the acquisition.

Will Facebook’s upright stoicism and lack of transparency infect Instagram by osmosis?

Or, will the group (like Facebook employees have attempted to portray to the media) remain separate?

No one knows. Therefore, Twitter users are taking the safe route: deleting their Instagram accounts. Engadget, ZDNet, CNET, and PCWorld, among others, have all posted articles on how to do this — and people are reading them.

But is the acquisition all bad?

According to Chris Taylor of Mashable, maybe not. He recounts how YouTube survived its YouTube merger, due to Google’s “don’t be evil” approach. Google left the YouTube team alone to do its own thing with Google cash and advice, and YouTube excelled.

Chris Taylor even notes that “Google Ads took years to creep onto YouTube. Indeed, the first result of the acquisition was that Google effectively shut down its own rival, Google Video.”

He also argues that the “DIY hacker culture” is strong at Facebook, and therefore it will respect Instagram, and leave it alone like Google.

Hopefully it will, but even if it does, the battle is not over. For Facebook to keep Instagram successful, not only does it need to win back the users it lost just yesterday and today alone, but it needs to make sure everyone knows that this is not “Facegram” and is still “Instagram.”

I am pretty biased; I love Instagram, and honestly think it has changed the photography landscape forever. So to all you Instagram users out there, I present my plea: Please, please do not delete your Instagram account. Facebook will not mess this up.

Anyhow, Mark Zuckerberg has shown that he will most probably go with what makes more sense financially, and if it makes more sense to leave Instagram separate, he will.

What is important is that all Instagram users voice their opinion. Tweet using hashtag #FaceGram and remind Facebook that you, the user, should also have a say.

Even if Instagram goes down because of this, Instagram will have started a revolution in digital photography, and its CEO and team will have received an awesomely large check.

Hopefully that’ll console them.

Article Written by

Phillip Hedayatnia is the founder of streaming network The Netcast Network, Web design, authoring and media agency CrazyDragon Interactive Media, and hack lab CrazyDragon Technologies. He is also an entrepreneur working with Shaker LaunchHouse, Augmented Reality Cleveland, and is the inventor of the YouCue TV digital streaming box. You can watch Phillip on The Netcast Network (netcastnetwork.net) and listen to him on NCNradio (ncnradio.crazydragon.net).

  • http://twitter.com/davidclare1 David Clare

    Why are people deleting their accounts?  The ink on the contract hasn’t dried yet, I think people are just over reacting slightly.  I’v never used Instagram, although I’m going to try it out after I’v finished writing this.  

    I think people should wait it out, and see what happens.  If Facebook ruins it, they’ll be damaging themselves.

    • http://about.me/chris.charabaruk Chris Charabaruk

       People may be overreacting, but look at what usually happens to startups when they’re purchased by much larger companies. They’re usually swallowed up, the service(s) provided picked apart and merged with those of the purchaser. YouTube was an outlier, and even then, these days it’s pretty much a cog in the Google machine. No matter what Instagram may say, the odds are against it remaining independently operated in the medium to long term.

      This is far from Facebook’s first acquisition, and their history has been to more or less strangle what they’ve bought, even if they’ve continued to let it run (see FriendFeed, for example). It’s not surprising that people are screaming that the sky is falling, because that’s generally how it’s been when small companies have been purchased by Facebook, Microsoft, Apple, etc. Again, there’s a chance that Instagram will be allowed to manage itself and act without interference from above, but it’s a pretty slim one.

      • http://www.facebook.com/profile.php?id=100002634180392 Phillip Hedayatnia

        Yes… I agree absolutely (after all, that’s why I wrote the article). I think it is everyone’s responsibility to scream that the sky is falling, because if Facebook begins to think Instagram was a bad buy because they bought them (confusing!) Facebook will leave Instagram alone. It’s all about the money. ALTHOUGH Mashable’s Chris Taylor wrote a great article about how this can all go right… and I’m sure hoping he’s correct and I’m wrong… http://mashable.com/2012/04/09/facebook-instagram-opinion/

  • Peter Paul

    • http://robertglenfogarty.com/ Robert Glen Fogarty

      Clear rebuttal! Or agreement? I’m not sure what … means.

  • http://twitter.com/paulkinet Peter Paul

    I’m very sad about that takeover. I prefer a colorfull company landscape in net Business. Takeovers depending on money could slowing down technology development. 

  • Dialyn

    What I’m sad is how flooded I am with really bad photographs from people’s phones. I don’t care how many filters you use, a bad photograph doesn’t get better just because you slap a filter over the top of it. Means nothing to me. I don’t use Facebook or  Instagram. 

  • guest

    As I understand it, every time I upload a photo to Facebook, it becomes property of Facebook. If I upload a photo to InstaGram, is that photo now property of Facebook?

  • michael magee

    There is a long history of this in the gaming industry, the most innovative game companies would be snapped up by the larger companies that had a culture where innovation was difficult (or in the case of Microsoft almost impossible). The talented team at Bungie helped launch xbox with Halo, spent their time with Microsoft studios and then took their money and quietly exited to start new companies. That is perhaps the upside to this, the innovation and entrepreneurial thinking behind Instagram is going to show up again someplace else with a group that now has enough money in their pocket to make a difference.

  • Vince

    because I should instagram and public that