Reasons which made Facebook to acquisition Instagram for 1 billion dollars
It is well known that the social networking giant Facebook made the purchase of the photo-sharing app for an astronomical $1 billion and the purchase was the center of the excitement and frenzy then. The Facebook fans rejoiced while the reaction of the Instagrammer base was mixed.
The query might easily arise to everyone as to why Facebook took the decision to purchase a brand for $1 billion which originally did not feature any money generating means.
Related to that venture done by the social media giant, following were the reasons as to why it took up the action related to the acquisition of Instagram.
It featured the money to make the purchase
Based on the Facebook brand’s S-1 filing, then it had a huge amount of cash and based on certain reports it was noted that the social media giant had a total sum marginally less than 4 billion dollars in cash. This could be a major cause as to why the action was carried out.
To be at the forefront of the competitive market
Facebook must have understood the fact that there were several other brands which could have bought Instagram where Google is an avid example. Hence Facebook made the decision with regards to the deal of purchasing the photo-sharing app which offers its users a retro and vintage look to the photos
The deal was made to ensure revamping of Facebook’s Mobile Apps
Instagram is no doubt one of the hottest trends in the technological market. Coming to the mobile apps of Facebook, although they were popular did not match the intensity level of Instagram and thus Facebook wanted to make use of the fame and demand for the photo-sharing app for its benefits and also to bring new touchups and upgrades for the social media giant’s mobile applications.
To offer a new and different look
Facebook had been around for some time and based on reports, it had lost some of its charm and fascination. At the time the deal was made, Instagram was reportedly featured to have 30 million Instagrammers and Facebook took the decision to rebrand itself and offer a unique and different look with the help of all the Instagrammers who sure could prove to be advantageous to the social media giant
Venturing into new paths
A long-standing aspect of Facebook is its usage to view other people’s pictures. At that time, Facebook was in a precarious state of offering a total change to the appeasement of its customers. Now all the Facebook fans have an assortment of amazing filters which serve effectively to enrich their photos posted on Facebook and ensure an enthralling experience. As based on what the founder and CEO Mark Zuckerberg had to say, this integration of both the brands will result in an amazing photo sharing experience which is a primary reason as to why Facebook serves to be very much popular.
Focusing on users featuring particular information related to mobile advertisement generation
It is typical that a gourmet will prefer to share pictures of delicious food and a swimmer will upload photos featuring his/her swimming accomplishments. On evaluating Instagram with the social media giant, the latter failed to incorporate the component which the former had- which was related to being very much specific about every user information. Facebook required that data to reinforce its presence and it could also be manipulated for mobile advertisements.
The necessity to get real
Ever since its inception, Facebook assimilated a lot of money and assets along with the incorporation of users numbering in the millions. Analysts revealed that in the case of Instagram, it featured the ability for the Instagrammers to share real-time experiences. Related to the same, Facebook also wanted to emulate the success and hence made the purchase. This is a prevailing concept as to why the old school Instagrammers are not still able to accept the purchase of the app by Facebook.
Providing the user with a touch of retro
The main underlying logic related to why Instagram was developed was to offer the Instagrammers a retro feel and look with relation to the existing photos. Facebook in regards to the concept was a long way from surpassing Instagram in the same. Thus seeing the futile attempt behind developing a competitive app to rival that of Instagram, it made the deal to purchase its rival.
On a global scale, Facebook was under the eyes and scrutiny of the experts regarding how it would enhance its enterprise with the help of its acquisition Instagram following its huge expenditure related to the purchase of the photo-sharing app.