Instagram acquisition: Facebook targeting mobile revenue

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By Ayeshea Perera /  10 Apr 2012 , 16:53

Facebook’s acquisition of Instagram has got the whole tech world talking about what could have prompted the acquisition – and why Facebook was willing to pay so much money for the photo sharing app.

The Instagram acquisition is a part of Facebook's mobile strategy

Some say that the acquisition was simply a way for Facebook to take out a competitor, while others feel that the social media giant wants to own the online photo sharing space. However, Digital strategist and tech expert Kevin Anderson feels that another possibility is that Facebook is looking to increase its revenue stream from mobile, and the acquisition of Instagram is one step towards doing that.

Facebook already receives a significant portion of its traffic from mobile, but the company has not been able to make as much money through this platform. Anderson feels that with the world shifting towards mobile, companies need to concentrate on applications that can generate revenue streams. And Facebook would have the opportunity to generate ads against Instagram.

Instagram users have also expressed concern that the acquisition would do more harm than good to the photo sharing app. There have been worries that the user experience will get diluted, or worse, that Facebook will eventually shut it down. Anderson feels however, that it would make no sense for Facebook to shut down Instagram, and would in most probability simply integrate it into its platform.


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