As web based companies expand beyond their original remit is there a need to directly monetise all aspects of the business or can knowledge gained in one area be applied elsewhere to enhance performance?
Facebook's acquisition of Instagram has a partial similarity to the launch of Google+ in that they are both social properties outside of the core business which can be used for data collection
Google and Facebook are both in the information business but their primary business gathers data in different ways: Google via search and Facebook via user-generated/shared content and relationships.
Google launched Plus to utilise the social model of data collection. User content, shares, +1s all help to flesh out the social graph and when linked to the core business of search give Google a much better picture of out likes and interests and real-time trends.
Facebook has one of the largest data collection models going with such a huge range of data being freely offered up by its members. The only problem is that the data is such an amalgam that, perhaps, signal can get lost in the noise despite some of the most complex algorithms around. Instagram offers a different kind of social graph and, as it is more focused, is a good counterpoint to the main Facebook graph.
Does Facebook need to directly monetise Instagram?
It is widely accepted that mobile is an under utilised resource when it comes to Facebook making a buck but is Instagram the right place to do it? The application is a perfect example of a clean, simple mobile application and its users love it for this simplicity. Does Facebook want to ruin that? Most likely not.
Just as with Google+ would Facebook be able to gain enough data to better target advertising on the website without needing to resort to mobile or, as I suggested, would it make more sense to use the different social graphs both combined for an holistic picture and independently for "per platform" ad targeting based on our use on that platform?
Is this all made irrelevant by the IPO because of which Facebook may feel pressured to directly monetise mobile anyway?
What are your thoughts?
Why not discuss this on Google+ here.
Image by Jeremy Brooks