Photo sharing is a large part of the Facebook experience. The social networking site grants users the ability to upload images onto online albums, tag subjects in those images and make the final product available to their family and friends.
Facebook announced Monday it was taking the next step in expanding its photo-sharing service by acquiring Instagram, a popular photo app for iPhone, iPod touch and most Android users that enables them to take and edit photos before sharing them on the Instagram website, according to an article in TIME Magazine.
Facebook agreed to pay Instagram about $1 billion for its acquisition. The transaction, which is expected to occur later this financial quarter, will come in the form of cash and Facebook shares.
There is no question that Facebook is hot right now, so it makes sense that it would seek to acquire a popular photo site like Instagram. Hopefully, it can turn the Instagram product into something widely accessible.
But the amount of the transaction raises some questions. Instagram is free to users, so how is it worth $500 million? Also, why is Facebook agreeing to pay double the product’s worth? To put the transaction into perspective, Google purchased YouTube for $1.65 billion back in the day. It seems awful to pay $1 billion for a young, mobile, photo-sharing site.
What does Instagram really bring to the table? Will it really make Facebook’s photo-sharing services better?
Some Facebook users also said the social networking site needs to reconsider how it markets and develops its apps. With Instagram’s strong following, Facebook will be encouraged to give the new app the care and attention it needs. After all, this is the first time Facebook is purchasing a product with such a large number of users. Currently, Instagram has 30 million users with 5 million photos uploaded each day.
All things considered, Facebook founder Mark Zuckerberg said in his press release Monday that Instagram would be heavily involved in the creative process. Really, though, only time will tell.
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