Facebook Makes Moves on Instagram Users

https://www.bloomberg.com/news/articles/2018-07-13/facebook-is-desperate-for-instagram-s-millennials

by pdog • 8 years ago

120 112 8 years ago

40acres• 8 years ago

Facebook scooping up Instagram has to be one of the best corporate acquisitions over the past 20 years. Hindsight is 20/20 but it makes sense that a simpler social network like Snapchat and Instagram would be a threat to Facebook once everyone's grandma got an account. A really interesting counterfactual would be a world were Facebook, Instagram & Snapchat are all competing.

soziawa2• 8 years ago

Don't forget WhatsApp. There is absolutely no escaping Facebook.

fredley• 8 years ago

At least with WhatsApp they only have my Metadata...

segmondy• 8 years ago

Are they going to scoop up all future social network players? There are many more to come.

Analemma_• 8 years ago

Probably. I loathe Facebook as both a product and company, but I have to give them credit: they're smart and they know what they're doing. They're not going to be caught out easily by the usual "disruption".

Facebook knows the lifecycle of social media networks, and knows that the way to stay in front of the inevitable decay is to watch like a hawk for the New Thing and either buy it (Instagram, WhatsApp) or clone it and stomp it with network effects (Snapchat).

troydavis• 8 years ago

If they see any others as existential threats, yes, all of them. Facebook’s current valuation is $599 billion. Instagram was roughly $1 billion at the time it was acquired.

Facebook could acquire 100 more Instagrams and have every single one of them fail - or even shut them down - without all that much dilution.

(Cisco and EMC from 1990-2010 are successful examples of this strategy. See DataDomain, Isilon, Cerent, and arguably Crescendo for example acquisitions.)

AndrewKemendo• 8 years ago

Either scoop up (IG, WhatsApp, tbh etc...) or crush through imitation (Snap).

Apocryphon2• 8 years ago

There will be more, but I'm not convinced there will be "many." We seem to be hitting a peak of social networks, even if it's only a local maxima.

fullshark• 8 years ago

Seems like it.

Exhibit A: https://techcrunch.com/2017/10/16/facebook-acquires-anonymou...

Exhibit B: https://www.engadget.com/2018/07/02/facebook-shuts-down-tbh-...

paxys• 8 years ago

People have ridiculed every Facebook acquisition when it was made, but time has constantly proven them right.

Keyframe2• 8 years ago

Still waiting on that Oculus deal.

beefield• 8 years ago

A really interesting counterfactual would be a world were Facebook, Instagram & Snapchat are all competing.

Obviously, antitrust laws are among the many things I know nothing about, but it still difficult for me to understand how they can allow facebook, instagram and whatsapp to be one corporation.

aaron_m04• 8 years ago

Obviously, antitrust laws are among the many things I know nothing about, but it still difficult for me to understand how they can allow facebook, instagram and whatsapp to be one corporation.

Corruption might be the explanation.

ggg99905• 8 years ago

Read the book “Chickenshit”

thucydidesofusa• 8 years ago

It's because anti-trust laws aren't well-equipped to deal with modern monopolies.

the US's legal framework for anti-trust come from the Sherman anti-trust act of 1890 and the Clayton anti-trust act of 1914 (note the dates). The jurisprudence basically holds that being a monopoly isn't illegal per se, but what's illegal is abusing consumers - traditionally the cause of action in anti-trust lawsuits are that a corporation does something anti-competitive to increase prices. Facebook is mostly available at no cost to consumers (or at least, consumers don't have to pay to use the products) and so they avoid anti-trust scrutiny.

To see it in practice, check out [1]. Some Japanese auto part suppliers were acting in an anti-competitive way and what got the DOJ so chuffed was that consumers had to pay more for cars and car parts because of the behavior.

The Yale law journal has a great expose on the tension between our 19th/early-20th century understanding of abusive monopolies and the realities of 21st century commerce [2] and basically the core issue is that anti-trust laws are powerless to stop a company from acquiring the power to become an illegal/abusive monopoly.

The EU has actually been much more skeptical/hostile of the arrangement between Facebook/Instagram/Whatsapp , and the best legal thinking on using anti-trust norms to break up big tech comes from the EU. Unfortunately, I don't know much about it and I'll invite any expert to weigh-in.

[1] https://www.justice.gov/opa/pr/japanese-auto-parts-company-p...

[2] https://www.yalelawjournal.org/note/amazons-antitrust-parado...

airstrike2• 8 years ago

You mean a social network, an image sharing and a messaging app are all the same so couldn't be owned by the same company?

Anti-trust law doesn't prevent any form of consolidation. As a general guideline, the DOJ is only opposed to going from 3 to 2 competing offerings to customers.

Given the existence of countless other social networks, photo sharing websites and messaging apps, it would be hard to justify blocking any of these deals, especially in the case of Instagram which was still a very young and nimble company at the time of the acquisition.

giobox• 8 years ago

it [is] still difficult for me to understand how they can allow facebook, instagram and whatsapp to be one corporation.

With respect to Instagram, it's really not hard to understand - back in 2012 (when Facebook made the acquisition) Instagram had just 50 million users and made no money. It would have been ridiculous for anti-trust authorities anywhere in the world to step in. Remember too that the general consensus among a great many back then was that 1 billion dollars for Instagram was an absurd purchase price for what was perceived as a relatively tiny little start up with a very uncertain future.

While everyone likes to bash Facebook, the growth they have achieved with Instagram since acquiring it is pretty impressive, 50 million to a billion users in 6 or so years, and it's not like there wasn't significant competition along the way from Snapchat etc.

XalvinX5• 8 years ago

Facebook knows how to keep the government happy by just handing the NSA and whoever else all the data they hoover up. So I suspect they can get away with whatever and no one is going to say too much about it. They provide a great service to the powers that be!

zjaffee• 8 years ago

It's unclear if instagram would even be nearly what it is today without facebook, my guess is that both snapchat and twitter would've filled all the holes facebook was able to fill with instagram.

guelo• 8 years ago

I think the Youtube acquisition beats it.

nbar1• 8 years ago

I don't see this as an issue. Google does it with all of their products.

If you own a flooring company and a cabinet company, you're going to try to convince your flooring customers to buy your cabinets.

SlowRobotAhead2• 8 years ago

I don't see an issue, but I think it's funny how many of IG users STILL don't know they're actually using Facebook.

minikites• 8 years ago

Why is that funny? Lots of businesses go to great lengths to segment their products and sometimes play them off each other (e.g. Blue Moon pretending to be a craft microbrew despite being produced by MillerCoors).

qmalzp• 8 years ago

I'm not sure how many people care. It's like finding out Pepsi owns Aquafina.

martin-adams• 8 years ago

Not really any different having two jewellery stores opposite each other in a shopping mall giving you the feeling of choice. Only to discover they are owned by the same company.

skinnymuch2• 8 years ago

You and others here probably don’t know half of the companies or brands owned by other companies or brands.

avip2• 8 years ago

I also don't know I'm "using microchip" with my Atmel or SMSC - and I really don't care either.

johannes12343212• 8 years ago

Many don't even realize Facebook is a company.

rhombocombus• 8 years ago

I mean, it's the same company but a different product (aside from the ads which are the real product). IG has pictures that are cute or funny or cool, FB is a sordid wasteland of misinformation, bickering, and unhappiness. I'm ready for IG to devolve into another misinformation machine any day now since that seems like it is really lucrative for FB, but for now I think IG's simplicity and image focused UI filters a lot of the garbage out.

cm2012• 8 years ago

Instagram is a good 20% of most Facebook advertiser's account spend already. Not at all insignificant. For young and female targeted products, it's even higher.

tribune• 8 years ago

As a member of the relatively hip 20-something social set in New York, I can say with confidence that Instagram is "where it's at" with this group. The introduction of stories and other Snapchat-like features has dramatically increased Instagram's usage among my friends (and definitely snagged plenty of app-hours from the former).

Like the article says, Instagram is absolutely an escape from the hostile interfaces and hostile posts that abound on core Facebook. It's still cool and it's still fun. Whatever the internal power dynamics, it seems unlikely that Facebook would be stupid enough to throw this away. What do they care if their bread gets buttered through the Instagram app?

Another interesting thing to note about Instagram is that a high follower count has become a status symbol. As people invest time and effort in building a large following, their commitment to the platform increases. It wouldn't surprise me if Instagram accounts for more than half of Facebook's value in the near future.

bobwaycott• 8 years ago

What do they care if their bread gets buttered through the Instagram app?

Three things immediately come to mind:

A. They paid a lot of money to acquire Instagram and want that investment to pay off.

2. There are users on Instagram from whom Facebook can extract value and profit.

D. If there is a way to make a buck off a user and their activity on a Facebook property, rest assured FB will take the step to make that buck.

javiramos• 8 years ago

I keep thinking that, in the grand scheme of things, the Instagram acquisition was a bargain.

ggg99905• 8 years ago

It’s not surprising that the young rich beautiful people like Instagram. But I still appreciate that Facebook, Reddit and other text-based platforms allow an ugly person with a dumpy apartment and rusty car to publish their thoughts with the same format that Bill Gates would have.

alkonaut• 8 years ago

I don’t see why beauty would improve the quality of Instagram posts, other than for people in the beauty business. For friends following friends (which I assume is the majority of users, I don’t follow a single person I don’t know personally and that doesn’t also follow me) beauty and glamour isn’t really important. I just post pix of holidays and kids to keep family up to date and entertain my friends. Yes I’m neither young, rich or beautiful.

For thoughts in text I think twitter is a better platform than fb.

_emacsomancer_• 8 years ago

What does Bill Gates have to do with this? (I was with you up to that point.)

reaperducer2• 8 years ago

it seems unlikely that Facebook would be stupid enough to throw this away

This sentiment expresses the difference between being 20 and being 40. Over the years, you will witness many companies snatching defeat from the jaws of victory for no fathomable reason.

code_duck7• 8 years ago

Facebook has been steadily making Instagram worse since they acquired it, by adding more and more features. Basically, they’re turning it into Facebook, the existing product, because that’s what they know how to do.

Currently, users in my Instagram social group are pretty unhappy with the change to a filtered feed, which produces a lack of visibility. This is exactly like the Facebook newsfeed, Where I can post something to my 2000, 500 friends… It gets no likes and no comments, compared to posting in a group with basically the same member where the same content receives plenty of attention, because it was actually displayed to the people who chose to follow me, without me giving Facebook money. There’s not much point in having 8,000 followers if they only show it to 2 percent of them.

542458• 8 years ago

Facebook has been steadily making Instagram worse since they acquired it

Define worse, because basically every metric I'm aware of says that instagram is more popular and has higher user engagement than ever.

I think your "filtered feed" complaint is something that really ticks off a narrow segment of users, but that the remaining 99% doesn't care about at all. All they notice is a more interesting and relevant feed. Look at it this way - basically every major social network (instagram, twitter, facebook, youtube, etc) has implemented some sort of filtered feed. Every time some small segment of tech-savvy users or power users gets extremely annoyed and complains loudly, but I'm unaware of any network reversing the decision and going back to pure chronological - to me, that says that their internal engagement numbers overwhelmingly justify the decision.

bgun• 8 years ago

Disagree. Replicating Snapchat's "Stories" feature was one of the best value-adds to the platform since Instagram was built.

mbesto• 8 years ago

Another interesting thing to note about Instagram is that a high follower count has become a status symbol.

Vanity is a helluva drug.

pm904• 8 years ago

It really is.

As a relatively new user, I would follow a lot of, lets say, good looking folks. I quickly realized that it had a huge detrimental effect on my self perception and image. Now I mostly follow friends and people I know, and maybe a few politicians but very few celebrities and such.

pm904• 8 years ago

It has actually made me wonder why Instagram needs Facebook at all. If they had managed to stay independent, I'm sure they could have continued to do very, very well.

woah• 8 years ago

They were bought by Facebook a long time ago. Who can say how they would be doing if that hadn’t happened?

mi100hael• 8 years ago

Instagram was barely two years old when FB acquired them for $1B along with a promise to allow Ig to continue to operate independently. It'd be very hard for most founders/investors to pass up such a deal, particularly with an app that was even more of a one-trick-pony at the time.

ajcodez• 8 years ago

Same in Toronto. 22+ is Instagram only. A few years ago you would add each other on Facebook. Now it’s Phone or Instagram socially, Twitter in tech circles, LinkedIn in business circles. People over 30 yrs will add you on Facebook but nobody younger bothers anymore.

meesterdude• 8 years ago

Already deleted my facebook - not much stopping me from deleting my instagram next. But i'm not a very active user anyway, so i'm not sure if it'll make its way into the few folks i follow.

Zelphyr2• 8 years ago

I don't know why this is getting down-voted because it is relevant to the article. People have had it with the caustic posts on and outright lies about privacy by Facebook so they're moving to Instagram. Facebook appears to mostly have left Instagram alone since acquiring it but now it is getting more involved since the trend appears to indicate that Instagram is becoming the profit center.

But for people who mistrust Facebook, that is more than reason to drop Instagram. The thinking is, "I've seen what Facebook has done to itself. It's only a matter of time before they do the same to Instagram. I might as well get out now and find some better alternative."

earthandmoon2• 8 years ago

The problem will not be solved by you and me deleting Facebook, Instagram or Google. The biggest problem is your friends who share your name and number with these social apps without thinking and without your approval. And you can’t even ask these big social tech companies to delete it. That’s the really scary thing in all this!

earthandmoon2• 8 years ago

I would like to add: the implications of someone adding your personal information unauthorised to these social networks has not been tried legally.

Zelphyr2• 8 years ago

Not to mention the times my face shows up in a picture someone posts to Facebook. I'm under no delusion that Facebook actually deleted my account. They know what I look like even though I haven't had an account in years.

subpixel2• 8 years ago

I also deleted my Facebook years ago, and wince every time I feel compelled to look at Instagram.

Speaking of dark patterns, few people probably ignore Instagram long enough to notice, but after weeks and weeks the app starts showing you head-fake notifications. They aren't mentions or messages, just 'alerts' that people you know are using Instagram and you should be looking.

XalvinX5• 8 years ago

that kind of spammy shit would have had me off of it very quickly. but, thankfully i never used it in my life...and never will. if i wanna see cat pictures and latte art or Beyonce's latest plastic surgery updates i can just google it... it all looks the same after the first 5 minutes anyways...who is that bored? my god.

ArmandGrillet• 8 years ago

Instagram Stories is one of the most addictive application I have ever used.

It obviously replaced Snapchat but also Facebook, Tinder, even WhatsApp. What are you friends up to? Check your friends' stories. Wanna see some beautiful stories? Check some influencers' stories. Wanna tease a party or share fun pictures during a party, only with your friends? Use Instagram Stories. This app is a dream for people in their twenties.

The number of use cases this app created and the engagement it causes (the delay between posting a story and when it is seen by friends is rarely more than a few minutes) is really astonishing. Facebook will likely not die anytime soon, but Instagram is now the app and its acquisition was one of the smartest moves in the history of Facebook. If you want to learn more about the acquisition, I strongly recommend this article: https://www.vanityfair.com/news/business/2013/06/kara-swishe...

rimliu• 8 years ago

For me Instagram Stories made Instagram worse :( But that's because I still look at Instagram as an photo sharing app, not social network app. I guess I will need to revise my views sooner or later :(

subpixel2• 8 years ago

Of course stories and all the other modifications have made Instagram worse. The same way reality tv made television worse. But people love it and just eat it up.

j79• 8 years ago

Damn, I'm glad I'm not on this drug.

anant90• 8 years ago

A for-profit business is moving levers under its control to increase its profits. Nothing surprises me about this.

andy_ppp• 8 years ago

With all the mess that keeps getting added to insta, I would love Twitter to add a basic photos thing that was just the Instagram feed without all the Snapchat rubbish.

grblovrflowerrr• 8 years ago

I don't know about the states but Instagram is a major promotional tool for cafes and restaurants in Japan. People take photos of their drinks and dishes and share them on Instagram, tagging the cafe and a lot related tags. Meta-accounts with lots of followers then repost those and create buzz for the cafes. Then on the weekends the cafes get swarmed by people who found out about them through Instagram, repeating the cycle.

If you're in a major metro area in Japan and want to find the on-trend coffee joints, check out Instagram.

pull_my_finger• 8 years ago

One thing I noticed after the most recent FB fallout, was that FB started aggressively promoting ads for IG. Now I guess they are trying to recollect their users now that things have calmed down a bit.

XalvinX5• 8 years ago

Hard to believe a billion people use this nearly an hour a day....don't people have lives anymore? Sad, is what this really is. While there have been times I've used sites like reddit that much, it is a helluva lot different being involved in a dozen ongoing conversations about deep subjects than looking at pictures and saying the equivalent "ooh, nice picture! your cat is so cute." or "that latte art is so super keen" 100 times a day.

Get a life, world.

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