Facebook Buys Instagram for $1 Billion: What the Experts Are Saying
On the heels of the social network's colossal cash and stock buyout of the photo-sharing app, voices in the tech world are speaking out for an assortment of reasons.
On the heels of the Facebook's colossal cash and stock buyout of the photo-sharing app, Instagram, techies are showing no hesitation when it comes to speaking out. Many are questioning why Facebook would pay $1 billion for Instagram, a start-up company with no outside revenue. Speculations range from attempts to eliminate competition to amping up Facebook's already soaring ad-revnue. Regardless, the pros are weighing in with their opinions on the transaction that shook the tech world.
"It’s still to be determined how Instagram’s photo-sharing services will align with Facebook’s, even though Mark Zuckerberg has vowed, for now, to give Instagram room to breathe. Maybe the answer, though, isn’t in 'active' check-ins. It might just be in your photos, already telling everyone where you are by sight and deed," says Lauren Goode from All Things D.
In an article posted on Tuesday, Business Insider's Jay Yarow recaps a conversation he had with a friend, who was "arguing Facebook is much more vulnerable than most people realize." Yarow claimed his friend's reasoning stands as follows: "I don't think the current world is about giant monolithic software companies owning content. It's whimsical one off apps that suit the need for a time and are replaced. Instagram doesn't solve Facebook's problem."
What could Facebook's problem be then? Surely the photo-sharing app will bring with it a slew of new advertisers with revenue to invest in the site, or so says Jim Edwards with the Business Insider. Jenna Wortham cites competitor Google as a possible factor for the transaction: "Facebook is getting ready for its own big payday. It is aiming for a public offering as soon as next month that could value the company around $100 billion. That means it can easily afford Instagram’s price, if only to keep a rising star out of the hands of competitors like Google."
Altimeter Group Analyst Rebecca Lieb points out that by merging Instagram with Facebook, the latter can tend to one of its "most urgent needs: making its service more appealing on smartphones." Lieb went on to say, “It’s easier to update Facebook when you’re on the go with a snapshot rather than with text."
In the end, Melissa Parrish, an alayst with Forrester Research, put all criticisms and speculations aside as she noted, "It’s the Web fairy tale that all start-ups dream of. They took a simple behavior — sharing pictures with friends — and made it a utility that people want.”
And who better to turn to for a final remark on one of the digital age's most historical transactions, than the recipients of the $1 billion. In a May 2011 interview, Instagram co-founder Kevin Systrom ever-so-accurately remarked, "The hunger to build stuff and put it in front of people is really valuable as you get moving in entrepreneurship." "Valuable" may be an understatement, Mr. Systrom.
As for those of us curious about the whole start-up app business, the 29-year-old entrepreneur assures, "There's no reason you can't start."
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