Facebook's acquisition of Instagram raises more questions than a simple "what's in it for Facebook" and could potentially alter online photo sharing for good.
In a post on Forbes, David Coursey argues that Instagram is Facebook's Pinterest killer. He is "very aware that many will disagree with this analysis" and I have seen a number do exactly this but is Pinterest really a Facebook competitor.
It is now.
By acquiring Instagram Facebook has made Pinterest a competitor as well as the likes of flickr and Google+, in fact anywhere users share a lot of pictures. Facebook has effectively said it wants to be the major player in photo sharing.
At first glance the Forbes article seems a bit fanciful and can be accused of overplaying Pinterest's status but when you consider it has recently been referred to as the third largest "social network" and Facebook has acquired Instagram to better facilitate it "building the best experience for sharing photos" it's obvious to see that Facebook is at least a little concerned about this upstart.
Pinterest is not a true social competitor along the lines of Google+ as it has a significantly smaller remit but, for those Facebook users who predominantly share photos, there is an obvious temptation to try the "next big thing" especially considering the buzz that Pinterest has been generating lately.
One key area where I disagree with David is that I don't believe Facebook would be best served by creating a new service with Pinterest type boards. As I posted yesterday, it makes more sense to hook into Interest Lists as this will enhance their functionality and give some people a reason to use lists where they might not have done so before. There is no reason search results could not be presented in a board-like fashion but this should not be the basis for any integration of Instragram in to Facebook.
With its IPO looming Facebook must ensure it has multiple revenue streams to justify its incredible valuation but is currently missing out on the whole mobile arena. Pinterest has come under fire for its affiliate use and trialling of Skimlinks (which has been described as a test and not a service plan) so there is potential for Facebook to potentially capture the market before the competition by leveraging the Instagram application on iPhone and Android.
Combining its existing social graph data with the new photo-specific relationship information from Instagram gives Facebook a great basis for ad targeting in a way that goes beyond the norm. Not only could advertisements be targeted based on interests and relationships but also on a per platform basis as our social graph will most likely differ in a task specific environment such as photography.
Whether Facebook makes a reasonable return on its investment remains to be seen but there is no denying it has placed itself in a strong position in relation to the competition with regards to online photo sharing.