When Facebook announced on Monday that it will buy Instagram for $1 billion in cash and stocks, both companies emphasized that the photo-sharing app isn’t going away. But that’s about all they focused on in the announcement, leaving plenty of other pressing questions unanswered.
Here’s what I’m still wondering about this monster acquisition:
How Successful Will Facebook Let Instagram Get?
As GigaOM’s Om Malik theorizes, Facebook saw Instagram as a threat. Photo sharing is a big draw for Facebook, but Instagram’s photo sharing became a phenomenon on its own. By owning Instagram, Facebook doesn’t have to worry so much, but that makes me wonder: What happens if Instagram continues to boom as a separate service, to the point that it overshadows Facebook? That could lead to a tricky situation for Facebook, as it deals with a fragmented, but very popular social network. That brings me to question two:
Will Instagram Forever Be Allowed to Not Make Money?
Facebook’s nearly a public company now, and $1 billion isn’t chump change. At some point, shareholders will want to know what the return on investment is for a photo-sharing service that, aside from being bought by Facebook, has no business model. If Instagram is going to “grow independently,” as CEO Mark Zuckerberg put it, eventually it’ll have to turn a profit for Facebook. Which leads to the next question:
What Will Facebook Do with Instagram’s User Data?
Facebook’s occasionally lax attitude toward privacy has led to concerns that Instagram’s user data will become ripe for Facebook’s picking (and rightfully so). But for now, it’s not clear whether Facebook will declare carte blanche over Instagram users’ personal data, such as location tagging and places mentioned in photo captions. At some point, Facebook will have to level with Instagram users about where their data is going.
Will Instagram Ever Expand to More Social Networks?
According to Mark Zuckerberg, Facebook plans to preserve Instagram’s ability to post to other social networks. At the moment, however, the only other social networks Instagram supports are Twitter, Foursquare and Tumblr. What happens if more direct competitors such as Google+ or Path release the necessary tools to support photo uploads from Instagram? Somehow I doubt that a Facebook-owned Instagram will be enthusiastic about supporting those other networks.
What’s Facebook Planning, Anyway?
That’s the billion dollar question. So far, Zuckerberg has made vague promises to “learn from Instagram’s experience to build similar features into our other products.” But Facebook already offers Instagram-like hipster filters, at least in its desktop software, and its social infrastructure for photo sharing was rock-solid long before Instagram showed up. Assuming Facebook didn’t simply acquire Instagram out of fear, we still don’t have a good explanation for what Facebook wants to get out of the service.
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