Once mocked, Facebook’s $1B acquisition of Instagram was a good move
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I can see a future, not even very far away, where facebook is essentially the AOL of our generation and having an account there is a punchline.
If so, what platform do they use for that?
Personally I get on Facebook twice per year, once on my birthday and once before summer to tell the world where I'm working.
That's about how it goes, then every once in awhile a new app will come up like house party recently, and everyone will jump on for a month or so then go back.
I don't see any point in switching to SMS now, especially when so many of my friends live in different countries.
this "kids dont think facebook is cool" narrative has been going on for years, and it just doesnt matter. they come around eventually. the network effect is too strong.
Recently however, everyone's drifted away from it like they drifted away from MSN. The few kids that are still there just use it to tag each other in memes. Instagram is the new Facebook.
Source: Me - personal experience.
Edit: HN is eating emojis
Either way, acquisitions this big have complex financial structures in place that would easily accommodate a payout over several years. The Roche acquisition of Genentech took more than 20 years, although the latter was already public at that time.
Depressing the stock is not the main problem of that. Insider trading is (he cannot liquidate FB stock on short notice as he has material undisclosed information pertaining to it).
He might elect to use a 10b5-1 plan (which basically empowers the broker to make the sell decision autonomously in the future based on a target price), but if you want that cash tomorrow, borrowing against the stock is more appropriate (see for example http://www.businessinsider.com/larry-ellison-has-a-10b-credi... ).
Let's assume for purpose of shareholders, I believe Zuckerburg (famously) has majority interest in voting shares.
In practice that should mean he controls who is on the board should they not vote in alignment with his preferences; however, certainly there could be other agreements/contracts the guarantee board seats here and there, that should all be available as a public company I just haven't looked.
At minimum, one would "assume" Facebook required board approval of a $1B+ acquisition.
if so, what would be the legal ramifications? I mean facebook is basically mind control for so many voters, they can push any info they want
Similar could be said for Facebook. Though, I think they just segmented their market better.
Bezos, I believe, is best at this. How many things has he acquired and left completely alone? It is almost baffling how good Zappos is for buying shoes, while Amazon is pretty awful.
Though, I'm now curious how much of this Bezos learned from him. Weren't they close? It makes sense to view these acquisitions as investments, instead of takeovers.
And for everyone that has given examples of Google doing this. Apologies for not responding individually. I am glad to hear it is more that they just get a lot of press for the mistakes. I'd love to see more press dedicated to what appear as successes. I guess they have to be ballpark hits to get press?
Facebook saw a trend in IG they couldn't compete with without fundamentally changing their product. Where IG could have created alternate complementary products and began eating onto FB market. There really isn't room for two networks like FB anymore and the adolescents I know won't touch FB. Its all snapchat and IG. (Which offer much better incentives.)
Both were moves to absorb a niche where each company would have difficulty compering. My claim is FB's was more forward thinking and less reactionary.
That is, Facebook seems geared to live beside insta gram. Video seemed clear to either beat or die to YouTube.
So yeah, I was trying to add to your comment. Not necessarily contradict it.
What about Waze?
Somehow YouTube survived!
I see a lot of smug in the previous thread that needs to be called out.
but does anyone else get a sense of schadenfreude when reading these comments
There are people doubting that Facebook could monetize or become a blue chip stock
There's a comment of a guy being sure that Instagram would fail and literally says "Bookmark this comment, see you in 2022" (Five years to go boys)
This is why I'm convinced that people should honestly share like 1% of what they are really thinking in comments. Yeah, there might be a 1% chance that Instagram would succeed, but do you really want to look like the idiot doubting it could ever happen, with your comment immortalized on the world wide web five years later when you're proven wrong?
People on Hacker News are only now just coming around to Snapchat, but I thought Snapchat was obviously going to succeed 4 years ago when I was still in college - 70% of the people I knew in college were using it.
You might object to this and claim that other apps (which are not guaranteed successes now) like Yik Yak should have been similarly "obvious" to me at the time - but that's just not true. I didn't know anyone who used other social media apps (like Yik Yak, etc.) at the time as much as Snapchat (if they did, they kept it to themselves).
But when it comes to social apps, there's just something about Hacker News being particularly closed-minded. Even in the face of overwhelming usage, I still see a solid plurality of cynical HN comments about any given social app.
I've no idea when you were in college, but if 70% of the people around you were using it, I presume it was already successful.
Government and regulations always protect monopolies!
https://en.wikipedia.org/wiki/Facebook,_Inc._v._Power_Ventur....
And I'd hardly call Facebook a monopoly in 2009 when that case was decided. I think Myspace still had more users at that time.
The world has enough silent cowards. Give me an outspoken person who puts their money (/honour) where their mouth is, any day.
in the end they were just speculators speculating
My point is not that "commenting on the internet is dumb cause it might make you look like an idiot" but the fact is that probably zero of the detractors in the HN link posted had anything other than an uninformed opinion
If you want people to shut up because their uninformed opinions annoy you, that's something else. Say that, and take the bad karma that comes with it.
https://news.ycombinator.com/item?id=7266618
Which I think has not yet proven itself to be a savvy one monetarily (but the usage numbers remain incredible)
I bet most people don't even know Instagram is owned by facebook.
If you look at how messaging has become the primary monetization platform in China, I would argue that WhatsApp is much more critical to Facebook's long term success globally than Instagram.
And the MO seems the same from my outsider perspective - they were mostly left alone till very recently.
It was turned upside down.
The old main feature: pay-a-reasonable-fee-to-chat-privately was taken behind the barn and shot dead.
I and my friends have now moved almost every group I was a member of over to Telegram (there is one left). And yes I know Whatsapp might have stronger encryption but for us that doesn't matter.
Instagram is not dying slowly, it's actually growing rapidly.
http://www.businessinsider.com/yahoos-plan-to-combine-its-sa...
But anyway Yahoo didn't ruin Tumblr and that's a thing to be grateful for.
Despite being an M&A buzzword, synergy is really important and doesn't mean meddling or interference. With Instagram and Facebook, consider that FB already had massive expertise in growing a successful social network, and ditto regarding infrastructure, as well as monetization. FB also advertises Instagram in-app for free. And Instagram is "cool" so there's major motivation for talented people at FB to do an internal transfer to Instagram.
Similar situation with YouTube and Google. e.g., Google was undoubtedly able to increase YouTube's growth rate by virtue of being the top search engine and tightly integrating all YouTube content into Google search.
With Tumblr and Yahoo, it's just not the same situation. They aren't headquartered on the same coast; their audiences don't overlap, which is especially bad for monetization; their products don't naturally interact in any way; the parent company has no experience with running a user-generated content property of this size; and the parent company has been viewed as being in decline for many years.
The real genius is, accurately evaluating if the teams are able to be left alone, with autonomy. And then moving on that accurate evaluation with quickness, and efficiency.
If that's leave them alone, then integrate them with HR/etc, and let them be autonomous. If that's integrate fast, and heavy, then immediately start having regular working meetings with teams in other locations to limit the little brother syndrome of acquisitions.
But getting the path right, is the genius in my view. It isn't as simple as always leaving the teams alone.
Snapchat I actually get, since it's presenting a new kind of communication model. Facebook I get. But Instagram is just like any old image gallery, with a very rudimentary comment system and almost no features unrelated to image uploading.
Making it easy to positively reinforce your friends' content creation.
Fine-grained filtering of content that's relevant to you.
It's probably also a case-study in how to market social networks. Get the right people on at the right time, so people want to get on and follow them, and then post their own content.
At the time, about the only thing you could do with pictures you took with your phone was sync.
Instagram was released at a critical moment in history when phone cameras were starting to get good and cellular Internet was starting to get fast enough to reliably upload them.
You can't look at the landscape today and ask "Why is instagram popular?". You have to look at it in its historical context.
Source: radio interview with the founders
Instagram smartest thing they did was leverage the Facebook social graph (something much harder to do now) to integrate instagram photos as posts in the feed, so that when a user clicked on them, you ended up at instagram rather than staying inside Facebook.
Could you give a bit more details about this?
One more: https://techcrunch.com/2013/01/18/facebook-data-voxer/
Facebook took a long time to get mobile right. Instagrams simplicity, and Facebooks lack of response was what allowed Instagram to grow. And dont forget Instagram was originally more a photo hosting adoon for twitter, similar to imgur to reddit.
When you compare the amount of work required to get a startup off the ground then to what is required now. (dual mobile platforms & web & social) And the total number of apps & services. It's a deluge of information.
Then is there much change to start a service or company these days & see success? Maybe I'm getting too old, but normally I'd be full of ideas. These days I can't think of any.
Luckily none of the photos were too embarrassing.
You only upload 1 photo.
True, someone can dump a lot of photos one at a time, but I think that's a bit of an instagram faux pas. It tends to be that if someone is on vacation (for instance) they don't dump all their photos on instagram, they choose their one best photo, crop it, add a filter to it, and try to make it great. You don't create an album like you do on facebook. This makes the quality of what you see in your feed a lot higher than what you would see on facebook. I've been told by a few heavy users of instagram that this is what they love about it.
IG is good because of that and this pushes IG to be more about experiences over BS news and meme-macros that set a FB feed into garbage. (Depending on the person obviously.) But the incentives for interaction are very different than those with a somewhat more "traditional" social app like FB. Furthermore it lacks the update nonsense of FB such that it doesn't feel like a chore to keep up with updates. The stream passes and what you miss you miss.
Even before instagram allowed full size photos, I was using another app to allow the whole photo to be edited, and then cropping the photo after, and then printing them out. My entire apartment is decorated with framed photos that I edited slightly in instagram, but you'd never know because the edits are very subtle. (to be clear i never even posted these photos to instagram, just used the app as the editor)
If you've ever edited a photo in instagram you realize the difference between the end result and what you started with.
Giving what used to be only reserved for people with expensive software and fancy computers to regular people (and making it easy), is definitely a huge piece of it too.
The sharing and social factor was built in. Take a photo and sharing was automatic, which is pretty neat.
The name was also a huge factor. Photo Filter App 2.0 wouldn't have cut it.
It's fine releasing under a temp name, but you have to make it a top priority to change it asap. I could rant on this for long, but the long story short for B2C products it's essential. If you deliver surveillance software for governments you can get away with anything.
Instagram became popular with the right celebrities at the right time - someone internal to the company no doubt has the user acquisition timeline and has worked out who the "patient zero" was. This sparked a wave of people joining to follow them and has effectively supplanted OK! magazine and similar. Just have a look at the most popular accounts:
http://www.dailydot.com/debug/most-followed-instagram-accoun...
There's essentially two big themes represented there, female celebrities and footballers.
I agree with the other posters on Instagram's features leading to a lower volume of higher quality content.
The UI makes the app very much about sharing photos you've taken, making content about things you have done not things you have seen on the web. And the app lets you know that those things should be beautiful. By default profiles are public, making content production more selective, and content discovery less based on personal connections.
What's most interesting to me is how the product shaped the cultural norms on the service.
If Facebook is the lowest-friction/highest-distribution place to share what's going on inside your head, IG is the place for leisure choices as identity. There's not a range of reactions, because everything on the service should be an expression of individual pleasure.
Many posts and feeds seem to focus on conspicuous, aspirational consumption (apparel, beauty products, cocktails, destinations, art galleries, etc.). It was a very smart choice for an ad-network.
You can't enlarge an image you're viewing. Designed for mobile first, yet the size you view an image at is tied to whatever size your phone screen is. Why? I'm sure the image they are sending over the wire isn't at all as small as your screen, so why restrict it like that?
I discovered it on accident
So we use IG as our primary way to say hello, send an update, and register a Like. And then we go on FB when we have more time, or want to share a link, or whatever. But this is less and less common, judging by the relative activity I see on IG vs FB for my own connections. (And even a lot of the regular FB users are cross-posting all their photos now.)
As such it's not that great a photo-sharing UI, but it works and it doesn't require Yet Another Social Graph.
I don't know how much this is a factor in IG's continued growth in the face of Snapchat -- after all I'm talking about a cohort 30 and older. But my gut tells me it's significant.
I'd like to think the quality of their app has something to do with it. Unlike almost every mobile app I use, it's a joy to use (Android version). It's always snappy (this is huge), things always flow well, there is a ton of little detail functionality in there but it never overwhelms.
It's also great to see people's posts for a location you've tagged in your shot and compare their experience to yours. Or just find them. I know no other social network that does this so well.
It's the only social network I've stuck with and gotten any joy out of.
The logic in both the article and most of the comments seems to utterly forget the context of which FB was in at the time.
And Instagram is now cloning major Snapchat features outright in the race to compete in mobile attention.
I started receiving notification emails from Instagram a few weeks ago, which I ignored at first thinking they were fake. On closer inspection they actually were from Instagram, so I clicked "forgot password" on the Instagram website, reset their password, logged in and deleted all their content and permanently deleted their account. By the looks of it, the profile belonged to some kid - a few family photos and so on.
It's quite slack of Instagram that this is possible. They should not be allowing people to create profiles and use the service before first verifying the email address used to sign up with. I guess basic verification is trumped by the need for "active users" to motivate these "stroke of genius" articles.
Also a random pretty girl pic gets 1000 likes while a good original post gets 100 if lucky. Why bother.
I wasn't much of an Instagram user for a long time until I started getting into photography. I'm still a total photography noob, but now my feed of pictures is a combination of friends and amazing photographers that serve as inspiration. I deleted my Facebook account a couple months ago and haven't looked back. Whereas I spent time on Facebook scrolling through vitriol, my time on Instragram is a constant stream of friends lives and beautiful pictures.
I've realized a shallow social network is all the social network I need.
Wow. That is so true. Certainly for a certain class of acquaintance/friend, all you really need is the lightest connection (but you still want a connection).
They only need to make a better discovery option than the "Follow someone".
>Finstagram (Finsta) is student's fake (or second) Instagram account. Students, usually girls, get a second Instagram account along with their real Instagrams (Rinstagrams), to post silly pictures or videos.
Also Facebook is a dead zone now. It's literally pointless political junk and rehashed memes shared by "friends". The only usage I have for it is to message my old friends.
Snapchat is also starting to die out ever since Instagram implemented their own "snapchat" feature. IMO Instagram just does it better than snapchat. Snapchat is just too bloated for me. See with instagram I can follow someone like Kanye West, see his life in cool pics and his "snaps" in a convenient way.
The thing is that the Instagram and Whatsapp acquisitions are responsible for fueling this idea that all you need to do is create growth, and Facebook and/or Google will pay billions to acquire your company. Snapchat would never have gotten funding if there wasn't this dream that this could happen. We'll see if Snapchat is worth the $25B that is purported for their IPO, but I think those two acquisitions were the catalyst for all of this.
But I still think $19 billion was about $17 billion too much for WhatsApp. It's a messaging product that doesn't directly threaten Facebook the way Instagram does. They could have created 10x $1 billion teams to compete and easily done better than what they have with WhatsApp. It seems like a cowardly use of $19 billion. Oculus cost them $2 billion and there are many other breakthroughs that are equally underpriced.
So Instagram and WhatsApp are what keeps Facebook ahead. FB itself (the social network site) is probably past its peak (in various regions).
I think you mean "This means I'll never really want to use the service."
Instagram has also added to Facebook's main product through the autoplay videos, a tech that FB engineers could not get to work until the Instagram acquisition.
Her entire network solely posts on instragram and lets it link to facebook. She finds it a lot more uplifting than the endless political stuff shown to her on facebook.
I came to this conclusion by wondering, who sold IG? I can't remember. I can't remember who created it to be honest. Because now they're a footnote. Everything they've done they could've easily done without Facebook and become a serious threat to FB and every other platform. But not now. Now they're on the bench. This is what competitors do. They buy you up and make sure you never work on anything that competes, and everything you do they take credit for.
https://news.ycombinator.com/item?id=7150927
https://news.ycombinator.com/item?id=6671371
https://news.ycombinator.com/item?id=9065240
Now they're planning to raise more cash in an IPO than many of the initial 'crazy' buyout offers at a valuation of something like $25 billion. And their CEO is engaged to a Victoria's Secret model. It turns out that there's more to building a business than complex engineering and one-of-a-kind services.
Look at what happened with Yahoo and Mark Cuban.
* Clicked link to read article
* Immediately overwhelmed by fullscreen overlay ad
* Closed fullscreen overlay ad to attempt to read article
* Immediately assaulted by blasting volume autoplay video ad
* Rather than read article, scroll around and attempt to quickly locate blasting volume autoplay video ad to mute or stop
* Unable to quickly find and mute the blasting autoplay nuisance ad, instead decide to close the browser tab without reading even a word of the article
* Remembered to enable adblock in Canary
What a great web experience!
Adblock auto-enabled => I like this site, I think I'll disable adblock to support the creator => Autoplay video ad blasting || ad displays over content || full screen ad appears without a clear exit => Adblock auto-enabled
The irony seems to be that ad companies are overcompensating for adblockers by offering more intrusive ads, which then inspires more adblocking, which then inspires even more intrusive ads, and the cycle repeatedly escalates.