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Thanks for the memories  July 26, 2012

About The Author

CNET Editor

Lexy spent her formative years taking a lot of photos and dreaming in technicolour. Nothing much has changed now she's covering all things photography related for CNET.

Focal Point

How Instagram will change the way Facebook values photography

(Screenshot by CBSi)

How time flies in the technology world. One week ago, Instagram launched its social networking and photography app on Android, after being available exclusively on iOS since its launch.

Instagram has now handed over the keys to Facebook in one of the most interesting shake-ups to the mobile photography world.

It wasn't too long ago that Facebook was reportedly working on Instagram-like filters after an apparently unsuccessful attempt at a first buyout.

But why does Instagram now hold the key to one billion US dollars?

Facebook is already the behemoth of online photo sharing, so it goes without saying that it doesn't need another avenue, or stream, for showing off photos.

With Instagram, an app that has arguably promoted and popularised the sharing of mobile phone photography more so than any other, Facebook now has access to an absolutely huge repository of data, as well as the mechanics of a successful mobile platform. This includes information about where people are taking photos, who they are interacting with and, more importantly, how people react to certain images by "liking" or "hearting" them.

In a statement issued by Facebook, CEO and founder Mark Zuckerberg makes it clear that the buyout is all about the number of users and the data they bring with them:

Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people ...This is an important milestone for Facebook, because it's the first time we've ever acquired a product and company with so many users.

One of the most-asked questions surrounding the buyout is around how Instagram is monetised, and perhaps, more specifically, the valuation. It has an incredibly captive and active audience, gathered together around the act of taking and sharing photos, but, as a business, where does its main form of revenue come from?

In this interview with CNET in March 2012, Instagram CEO Kevin Systrom detailed the company's revenue strategy. Most interesting was his statement regarding monetising the image:

What we want to do is build a platform where advertisers can come, and perform their advertisements. If you look at our medium, we're all about images. And images are really important to us, because they are the same language that advertisers tend to speak in display advertising.

There's also another important area to consider, and that's intellectual property. Facebook currently has a rather interesting take on user-generated content, and the rights that you sign away when posting your own creations on the social network, which you can peruse on the site. While Facebook says that it does not want to change the mechanics of Instagram's user experience, needless to say, there will be big changes going on behind the scenes in how you interact and share data with the app.

Facebook's EdgeRank algorithm already prioritises rich media, like photos, higher than other types of content. Taking over Instagram just goes one step farther in making a more personalised — and fully marketable — Facebook fit for advertisers.

What's most interesting about this buyout is how it has crystallised just how much visual content has shifted in value. In the past, a single photo and even the photographer behind the image was considered the commodity. Now, with a glut of photos created by just about anyone with a mobile device, it's how people interact with and filter through this mass of visual content, which will be considered valuable.

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DonW1 posted a comment   

I like Instagram but I dont link through Facebook And I've turned off all GPS data on all photo apps. I like to chose what I post and who sees it.


LukeR2 posted a comment   

I'm assuming when you take a photo with a gps enabled camera that location data will now go to facebook,

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