Hacker News Reader

Comment by ckocagil | Hacker News Reader

Millions (billions?) trust Facebook too. Yet, Facebook kept the Instagram brand and it paid off.

Facebook keeps Instagram (and Whatsapp) as a form of market segmentation. Just like how Proctor & Gamble sells eleven (!) different brands of laundry detergent:

https://en.wikipedia.org/wiki/List_of_Procter_%26_Gamble_bra...

Presumably they capture more of the overall market for detergent that way. Maybe the same mechanisms do not apply to retail in general.

Yeah, it was explained to me once by a bid for shelf space. If there are 2 brands, a new one gets 1/3rd of the space, if there are 15, then a new one gets 1/16.

Therefore making P&G more money.

At the time of acquisition, I think the Instagram brand was more popular and recognized among users than Jet.com. Jet.com didn't become a phenomenon before Walmart acquired it. Instagram was already extremely popular when FB bought it.

Instagram had like less than 20mn users when FB acquired it.

If you peruse the HN comments from the time, many of them were convinced that this was a waste of money (though not the top comment, interestingly enough): https://news.ycombinator.com/item?id=3817840

Brand trust goes both ways.

It seems plausible that as walmart.com becomes better known as a good alternative to amazon for straightforward items, it might actually make people trust the walmart brand more - and put more shoppers in stores.

I don't think it's a matter of trust so much as classism. I know some people who simply won't go into a Walmart because they don't see themselves as the kind of people who would shop at Walmart.

Different situation. Facebook and Instagram are social brands that signal which demo you'll find on each platform (at least at the time of acquisition).

Instagram's branding/demo was a big part of what FB was after.

Reply on news.ycombinator.com