Did Facebook Buy Instagram to Compete with Pinterest?

Posted on April 10th 2012

Did Facebook Buy Instagram to Compete with Pinterest?

Different forces may be converging to drive a major strategic move by Facebook. Just hours ago, Facebook announced that it will pay $1 billion dollars to acquire Instagram. Instagram is the app that allows you to take photos, apply various filters, and post them to your social streams.  The inherent aesthetic ethic of Instagram is beautiful, distinct, and artistic.

Meanwhile, the social landscape as a whole is rapidly evolving. The recent 2012 Digital Marketer Report for Experian noted that Pinterest is the 3rd most popular social network.    Clones are springing up all around, and a good part of the social media discussion has shifted to the power of different forms of visual curation and content creation.

A great post at the website Inside Facebook wondered aloud on this very question: how will Facebook deal with competition from a site like Pinterest?  Writer Brittany Darwell makes an excellent observation, “In past years when a social platform started to get traction as Pinterest has, Facebook responded by launching features inspired by its would-be competitors.”

The press release from Facebook has an interesting positioning quote: “For years, we've focused on building the best experience for sharing photos with your friends and family. Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”  Sharing photos based on interests sounds a lot like the mission of Pinterest to me.

Well perhaps we have our answer.  While at first glance, Pinterest provides little direct competition to Facebook.  As an Open Graph partner, the platforms interconnect and if the number of “pins” that appear in my feed is any indication, the integration is fairly seamless.  Users conduct a certain kind of interaction on Pinterest, and that gets reported back to their networks on Facebook. 

But as a general influencer, there’s been a lot of talk about the impact of Pinterest on design.  Mark Zuckerberg has reportedly liked FriendSheet, a company offering services that merge the best of Pinterest and Facebook.

On the financial side, it’s been a banner week for Instagram.   The recent release of their app for Android garnered a million downloads in the first 24 hours. With millions of loyal users, news of the impending buyout by Facebook raised concerns that services would be impacted or change.  Both Facebook and Instagram were quick to respond that the service will remain intact and largely unchanged for the foreseeable future.

Any analysis of the situation is obliged to note that as an investment, Instagram is a hot player.  With that kind of action seen at their Android launch, they are clearly only poised for future explosion.  And as an investor, Facebook is uniquely positioned to take advantage of that growth in a highly synergistic way.

The question that’s more relevant though, is what role this acquisition plays in Facebook’s overall response to Pinterest’s explosive growth.  Whether or not this is simply a feature enhancement choice, it’s safe to say that the acquisition of Instagram beautifully positions Facebook to own a significant share of the conversation on image curation and how it will evolve on social media platforms going forward.

LizAlton

Liz Alton

Liz Alton is a business writer and social media strategist.  She follows the latest trends in market research, social media, the mobile industry, and the entertainment design space. To learn more about her work, visit http://www.lizalton.com.

See Full Profile >

Comments

Is it just me, or has Facebook been much more reactive in recent years? Initially they were a very proactive company, making changes to stay ahead of the curve. While they are still coming up with new tools and features, it seems like many of he changes are a response to another company's actions (Pinterest, Google +, etc.). I'm not saying that making these changes are bad, because they need to stay competitive. But I wouldn't mind seeing Facebook become a little more proactive, I think it would also make them a little more credible.

Hi Reed!  I wonder how much of the whole reactive/proactive discussion has to do with the size of the company & it's user base, as well as with the scale and rapidity with which the social landscape that's evolving around them.  They definitely are the leader right now, but I think Pinterest rocketing to #3 just underscores your point: it's going to be super important for them to keep innovating aggressively to hold the position.  Best, Liz

Part of the reason for the apparent "reactionary" nature of Facebook could be due to its upcoming IPO. During this time, management is spending more time with regulators and I-Bankers, than they are with their development team. Also, any major acquisition, or product development, could have a significant impact on the price of the offering.

Hi BBWC - This is definitely a critical point.  The timing around the upcoming IPO is interesting - both strategicaly and also in terms of what implications this acquisition will have.  Usually speaking, most companies pre-IPO avoid major changes.  So it'll be interesting to see how it all plays out.  Best Liz

Interesting perspective. My thought was this was more of a shot across the Google bow. The name of the game is user data. Google + does not address this space, and yet with the Android release of Instagram, the landscape might change quick. This was a pre-emptie stike by FB (IMHO).

View our Spreecast conversation on this topic : http://www.spreecast.com/events/facebook-buys-instagram

As for Pinterest, I am still trying to see how it will shape the social media landscape. Just not sure yet.

 

comparing Instagram to Pinterest is like comparing a car to a horse farm.

Both social network sites are very popular sites in this current online market. Now  a days Pinterest is a raising on the online market. Pinterest network very helpful to small and large scale business owners. Most of the people like and participated Pinterest. Yet another one similar post has been publishing here: Facebook Vs Pinterest

 

Hope this info very helpful to your reders!!!