The Logic Behind Facebook’s Purchase of Instagram

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facebook's purchase of instagram

Close to five years ago, Instagram, the popular image-based social media site was acquired by Facebook. The purchase was all over the news that day and the move further cemented Facebook’s reign as a social media mogul up to this date. Instagram had a following of 40 million users which includes Hollywood A-listers and popular celebrities and this has now been merged as a part of Facebook’s ownership in a hefty amount of 1 billion dollars. However, a lot of critics also questioned this purchase thinking Instagram is not worth a billion dollars. 5 years later, let us analyze this purchase and how it impacted Facebook as a company.

1. Facebook Bought Instagram Before Anyone Could Have Thought of It

It was actually smart for Facebook to right away purchase Instagram after knowing that it was for sale. Other internet heavyweights such as Google would also have gone for it given that their social media channel Google Plus can greatly take advantage of what Instagram can offer. If this happened then Facebook would face an extremely good competition in the form of Google Plus.

2. Most Facebook Users Love to Share Photos

A lot of Facebook users use their respective accounts in order to keep photos and albums. However, let us keep in mind that Facebook’s photo features are not at its best but with the help of Instagram then that problem can finally be fixed. The arrival of Instagram brought in more filters and image effects that can help improve Facebook’s then-lousy photo features. This was definitely good news for a lot of Facebook users.

3. Facebook Has Become a Better Mobile App

A big percentage of social media users use their tablets and smartphones instead of surfing these sites in a regular computer. Facebook was originally designed as a website for desktop users that is why the site was a bit unstable when it first launched its mobile app. Again, the biggest issue for mobile users is image sharing and with the help of Instagram then these users will no longer be reliant of Facebook for image sharing because Instagram can now be connected to your Facebook account. FB mobile also has now become more stable.

4. Better Advertising Platform

Facebook also did not have problems when it comes to delivering ads in their website until they launched their mobile app. Fortunately, Instagram already know of this issue since they are primarily built for mobile users. The integration of Instagram helped Facebook in establishing a right way of delivering relevant ads to its users which propelled their PPC campaign and eventually more revenue for Facebook.

5. Facebook Acknowledges Competition

Facebook knows that even if they have a tight grip on their reign as a social media giant. This is never permanent and they can still be toppled away from it. They are aware that they are multiple social media channels chasing on their tails and any form of mismanagement that they are going to do will give the entities behind them some sort of leverage. This is why it is no wonder that Facebook is willing to spend a billion dollars on an image website that is completely unique on its own. This way they eliminated a possible competitor while raising their website to a certain level away from its current competitors.

5 years have passed since Facebook acquired Instagram through a hefty 1 billion dollar paycheck and both sites are still thriving up to this day. It would be safe to say that Facebook greatly benefited from this transaction. Although some people may say that the amount is too much, that should have been a non-issue for Facebook. The social media channel surely has recovered all the money that they invested on Instagram by this time. Facebook is now worth more than $100 billion and the amount that they paid to purchase Instagram is just a very small ratio of their worth. Considering that such move produced a lot of positive results most especially in their mobile platform then it can be said that it was a smart move after all. With Instagram integrated on all of Facebook’s services, both companies actually benefited from such move and it is not just a commercialism relationship.

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