Late yesterday, Facebook launched “Facebook Camera”, an iOS mobile app for pictures. Facebook users can take, enhance with filters, upload, view and comment on friend’s pictures. Sound familiar? It should after Facebook’s $1B acquisition of Instagram. Facebook Camera affirms that the Instagram acquisition puts all questions to rest on why it was purchased. Facebook purchased Instagram to remove the competition.
Facebook has received a lot of criticism lately about their ill-strategizedand executed IPO. During the IPO build-up, many objections were brought up about Facebook. One of these criticisms involved their lack of ability to monetize mobile. To be fair, very few social media companies if any have figured out how to do this. Embedded in the mobile conversation is something that is apparent to any Facebook mobile user, whether its the highest-powered phone; the Facebook mobile app has serious issues. The Facebook mobile app is slow, dreadfully slow, and notifications only work intermittently. Uploading pictures is a very slow and laborious process and users have to upload the photos, one by one, and have to wait as they are loading as they won’t upload in the background. If Instagram knew how to develop great mobile apps and Facebook didn’t, the acquisition could make sense, right?
Over the last six months, Instagram has been siphoning users off of Facebook. Instagram was fast, unlike Facebook. It was simple, unlike Facebook. And for some demographics, it was the new and shiny toy that wasn’t Facebook. Even though Instagram was a gnat to Facebook based on registered users and the fact it had zero revenue, it was alarming because of its momentum. Unlike Zynga’s Draw Something, Instagram had staying power. Instagram posed a long-term threat to Facebook.
Buying Instagram therefore solved twoof Facebook’s problems, right? It solved the mobile app and eliminated the competitive threat problem. Not so fast.
Facebook Camera is one of the best photo apps I have used and completely unlike the primary Facebook app. The app is fast, reliable, looks great and essentially duplicates every feature the Instagram app offers. The photo filters are named things that make sense, too, unlike Instagram. Seriously, the “Walden” filter? Add this to the giant Facebook audience and I can say that at least for this wave, Facebook has finally figured out mobile photos. What does this all mean? Facebook, as it was purchasing Instagram, knew all along it had the right technology and design to duplicate every Instagram feature and do it beautifully and fast, too.
Now that we know Facebook always had the mobile technology to do mobile photos right, this only leaves one rationale to purchase Instagram. It was all about eliminating the competitive threat Instagram posed. That is the subject of another analysis.