The internet world is still talking about Facebook’s $1 billion purchase of photo sharing service Instagram, which marked the biggest acquisition in its eight year history. This deal surely resulted in a nice payday for the people behind Instagram, but why Facebook? Why not other players in the social space, namely Twitter or Google+?
Well, Twitter expressed that it wanted to buy the service, but decided to pass. Google flat out said it wasn’t interested – sure. All that aside, Facebook and Instagram is just a better fit. Here’s why:
The user experience
People are infatuated with Facebook for a number of reasons. For many users, photo sharing is on the top of the list. Mark Zuckerberg and crew have been working tirelessly to get its image product to the point where it offers the best possible user experience, and while serviceable, you can say that it is still lacking in comparison to other options.
With the expertise of Instagram now on its side, the company will finally have the opportunity to get it right. Instagram may be no internet giant standing next to Facebook, but the 30 million users it was able to attract in less than two years is nothing short of impressive and says a lot about its ability to deliver a quality experience.
While Instagram could have been a nice addition to Google+, and perhaps even better with Twitter, it stands to gain the most under the ownership of Facebook. According to the social networking giant, the popular photo app will continue to run independently. In addition to increasing the company’s value heading into its initial public offering, Facebook now has access to the more than 30 million people who use the service, which comes in handy for advertising and overall growth.
The Instagram team, in particular, has the opportunity to become a valuable commodity in what could soon be one of the world’s most powerful companies. It’s a win-win.
Meant to be
When it comes down to it, Facebook was primed to purchase Instagram for the simple fact that it was just more ambitious than its competitors. As we mentioned in our opening, Twitter and Google both had their opportunities, but failed to seize the moment. Google for one, certainly isn’t lacking in the financial resources department, especially seeing how it offered to purchase deals giant Groupon for a whopping $6 billion back in 2010. Instagram would have likely sold to any company offering more than its $500,000 million valuation, and Facebook just happened to be quickest on the draw. Like they say, first come, first serve.
The hype surrounding Facebook’s acquisition of Instagram is similar to Google’s purchase of video-sharing site YouTube in 2006. Hopefully for the social network, the deal produces similar results. It is hard to see a company in Facebook’s position screwing up a good thing like this, but stranger things have happened. Stay tuned.
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