Is Instagram a Threat to Facebook?

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May 17, 2012 by Adam Huet

Does Facebook look at Twitter as a rival and competition? Does Twitter look at Facebook as a rival and competition? It would be crazy to think otherwise, of course they do. They are such big rivals that I have to put YouTube between them in my bookmarks.

Part of my bookmark menu

Having competition is great so that businesses will try to beat one another. Twitter is a faster service and if I want to learn about something that happened within the past couple minutes, such as the death of a famous person, then I would turn to Twitter before I go to Facebook. The information will be there quicker and I will, most likely, find a link to where I can learn more. Facebook will have the information but it will be people sharing their thoughts on a person or event due to the lack of restrictions for characters. Depending on the situation, one can be better than the other but one will never dominate the other. Very simply, apples or oranges? Both great but at different times.

But are they threats to one another is a question where I have to say “wait a second.” Because one will not beat out the other in terms of who is better. These sites are more or less opposites. On one you post short updates and a picture here and there, while on the other you aren’t restricted to 140 characters and photo albums consisting of 100+ photos is common. When I have a thought or a picture that I want to share, I make a decision between the two and I rarely pick both (with the exception of promoting blog posts and the like). One site is more suited for one thought than another.

I love both sites but I love them for different reasons, many of which I shared in this post comparing the two. Why I am going over this topic again is because of what I read in this post by a well-known blogger (I am referring to point number 2). He mentioned that Instagram was a threat to Facebook. I can see where he coming from with this because people use it to share pictures with their friends and connect through them. This is seen on Facebook but it is not as focused as Instagram’s method. But very much like Twitter, Instagram is an orange and Facebook is an apple. They are used for different methods of socializing on the internet. If you do see Instagram as a threat to Facebook then spending 1% of its market cap to neutralize that threat is the way to go. Taking in the threat only makes your business better, if you use that threat to your advantage.

The major difference between the photo sharing capabilities of these sites is how Instagram loves its filters. Filters that improve the look and feel of the photo. A photo taken anywhere, by anyone can look just that much better with a couple taps of your finger. An amateur photographer can look like a pro in a matter of seconds. Editing the same original photo in Photoshop could take 10 or so minutes but with these different filters, that time can be condensed into seconds. So how will Facebook use this technology?

As I see it, they only have a couple of options 1) keep them separate services and rake in the profit 2) add the filters to the Facebook uploader and keep Instagram as a standalone app or 3) fully integrate the two services and have Facebook with a better photo uploader. I am sure the decision that they end up making will be more complex that this and they may decide to do something completely different. But given those three options I would go with number 2 because people use Instagram because they love the way it is. Taking down that service and just having the new uploader would be a waste of a billion dollars. At the same time spending a billion dollars just to make a better photo uploader isn’t the most cost-effective method.

My guess is that they will unveil the idea or the actual service/product by the end of summer and it will be interesting to see exactly what they do with their neutralized threat. What do you think Facebook will do with Instagram?


**Update – This is from a recent Marketing 1 article that I had to write for class and since this is so relevant I thought I would update this post**

After a quick spike in the price, Facebook’s stock is down $5 from where it started at $38. Now it is slowly on the rise after increasing a modest $1.03 on Thursday. Many, many people bought the stock on it’s opening day in the hopes that its popularity would result in a gain for everybody but Wall Street proved to not be a popularity contest. Instead investors have been looking at Facebook’s future and it doesn’t look very promising. Facebook has failed to capitalize on it’s mobile platform which a majority of their users favor to the website. Another area that is has many flaws is it’s advertising that it does on the main website. Many studies have shown that it is failing in comparison to Google in the audience and the specific markets that they can advertise to. On the other hand, Facebook has just launched a mobile app that uses some of the features from it’s newly acquired Instagram as a way to upload photos to a users account more efficiently on an iPhone. Facebook also recently launched an app that allows a user to manage pages easier while on a mobile device. These two show that they are going in the right direction but they are still along way away from beating out Google and the others in other aspects than just popularity.

This is the USA Today article that I read alongside writing this section of it.

What do you think?

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Adam Huet

Adam Huet

Adam Huet is in the middle of starting a fantastic company

Adam Huet is trying to find happiness and success. In that process he has started a blog, a social media management and website design company, as well as many other projects.

He co-founded Colupon as the VP of Product before leaving to start Feast Software.

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