Why Instagram is Worth $1 Billion to Facebook

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Editor’s notes: Facebook’s recent acquisition of photo-sharing software Instagram has caused a lot of chatter both on and offline. As an internet addict, I’ve been following this story closely, and can say with confidence that of all the articles covering this $1 billion deal, Emily Price’s piece for Mashable is right on the money. It has been repurposed here for the That’s What She Said audience. Original article here. Follow Emily Price on Twitter here. All images are my own. 

Why Instagram?

Instagram was beating Facebook at its own game, and the social network needed to stop it before it was able to do more.

The photo-sharing app is essentially everything Facebook wants to be on your mobile phone. Facebook wants people using its mobile app to share photos of what they’re doing with friends and to share their location -– something Instagram users have no problem doing.

“For years, we’ve focused on building the best experience for sharing photos with your friends and family.” Zuckerberg said in the announcement Monday. “Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.”

Instagram was already huge. With the launch of its Android app last week it was poised to get even bigger, fast. While the company was valued at $500 million just before the Facebook buyout, it could certainly have grown to a $1 billion valuation on its own.

Adding Android support also puts the photo-sharing app in the hands of much of the smartphone-carrying population. Add a desktop app into the mix –- there are a few unofficial ones available already -– and you’ve got a fully-fledged social network on your hands.

“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,” Zuckerberg said. “We don’t plan on doing many more of these, if any at all.

“But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.”

Facebook wasn’t just buying an app. They were buying out the competition.

The bigger picture

To Facebook, being part of the mobile game means being one of the apps you’re using on your phone most regularly.

So while Instagram the app is a huge win for the company, the bigger win for Facebook is the staff of the company who built it.

In the Instagram announcement, Zuckerberg noted Facebook’s plans to “try to learn from Instagram’s experience to build similar features into our other products” and that the company was “looking forward to working with the Instagram team, and to all of the great new experiences we’re going to be able to build together.”

One thing Facebook is trying to build is a support system for web-based app developers. If you can run an app in your browser, then you can eliminate the App Store or Google Play store entirely. I could purchase the same version of Angry Birds to run on my iPhone as my friend using a Windows Phone. Developers could make one version of an app rather than one for each platform, lowering their cost and making it easier to get it in the hands of consumers.

Facebook sends 60 million people to third-party apps every month. While the social network has certainly gotten a substantial amount of users to use its iPhone and Android apps, the majority of people visiting Facebook on their mobile phones today are doing so through the mobile web.

The company is throwing a lot of weight behind a Ringmark, a mobile browser test suite. The open-source project is attempting to set standards for how mobile apps access hardware and run on your phone, and give developers an idea of what mobile browsers their apps might run in.

In its blog post announcing Ringmark, Facebook claims it’s working on the project “in order to make the mobile web better.” That sentiment was echoed by Pearce at our lunch, when he said the project was helping Facebook discover “how can we help smaller developers realize mobile web as a option.” The project, however, could also help Facebook.

Facebook already has a pretty sizable amount of backers for Ringmark, including huge browser manufacturers, handset makers, and app developers. With platform launch partners like Mozilla, Nokia, AT&T, Adobe, Netflix, Microsoft and Zynga, Facebook has all right players in place to make it happen. And with Instagram, now it also has a popular app with a ton of users to bring over to the mobile web as well.

“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.” Zuckerberg said in the announcement. Those additional people could potentially be those accessing the app via the mobile web.

What it all means

Integrated into Facebook, all those web-based apps could equal a ton of cash for the company — especially if it’s the one powering the HTML5 web store where all those apps will be sold.

Interesting to note: Neither Google or Apple have agreed to partner with Facebook on the project. Pearce said he couldn’t say why the two companies had declined to be part of the group. Both companies, however, do have huge app stores -– huge sources of revenue for them — that could be threatened by the success of a rival web-based app store.

Microsoft, currently trailing behind both companies in sales, is a part of the group. Developers currently shy away from creating apps specifically for Windows Phone. Web-based apps could come to Windows Phone the same time they arrive on iOS

There’s no denying that Facebook’s purchase of Instagram is part of a bigger picture. The company has eliminated its competition while gaining a team that has proven it can create a popular social app out of nothing. It will be interesting to see over the next weeks, months, and years how that purchase plays out and what Facebook decides to do with app, as well as the mobile web.

Why do you think Facebook bought Instagram? What do you think are Facebook’s mobile plans for the future? Let us know your thoughts in the comments.

*UPDATED* Check out this great infographic by KissMetrics on Instagram by the numbers:

April Fools From West Jet

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My cousin shared this video on his Facebook timeline, and before it was even done playing, I had to comment: “Is this for real???”

WestJet wants you to have a laugh on them today, proposing a (fake) “kargo kids” program. The program promises to “whisk your kids away” on a “magic carpet ride travel toboggan” (read: luggage carrier) when you check-in for your flight, allowing you a peaceful, child-free flight.

A Kargo Kids counselor supervises your children in the cabin, where they can run, scream, play, and eat from a “state-of-the-art feed trough,” as the video explains.

Good job, West Jet, for creating engaging video content that’s sure to go viral today, and thank God this isn’t for real. Although …

StorySelling: How to use Great Digital Content to Help Make the Sale

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Today was the final day of Social Media Week in Toronto, and it seems that we’ve saved the best for last, because this morning’s presentation by Lisa Hovat of Strategic Storytellers  was truly inspirational. In the spirit of information sharing, here are my notes…

  • Today’s presentation aims to help us understand how content can help us see life through stories and how content can build brand loyalty without “selling”
  • We think of our lives as stories, and science has proven that our brains actually store information like stories.. yet somehow, when we put on our business suits, we forget about story. What do stories and business have to do with one another?
  • Story is about a character trying to overcome obstacles in order to reach a goal; story selling is the same thing, but you’re using that story to achieve the same goals
  • Story is not about selling, its about telling: the real power of stories is that they’re memorable. You could spend hours telling someone the features of benefits of your product or service, but if you really want to get into their mind, tell a good story. Plant a good story in their mind. People replay stories in their heads because they show rather than tell. Stories add meaning, they open up points of connection. Think of A Christmas Carol by Charles Dickens: the ghosts don’t tell Scrooge that he’s bad and will be published; they show him. 
  • Stories don’t “sell” people; they entertain
  • Stories also spread. They last for years; people take stories and make them their own; we retell stories. Think of Nike. Nike isn’t selling sport’s goods; they’re selling the story of hard work & perseverance; just do it is a personal quest for perseverance. Nike has a story that bonds the brand to its audience
  • Story brings the value and vision of your company to life.
  • With social media, brands are no longer in charge, customers are. people don’t want to “do business” with salespeople. Instead,  they want to collaborate with real people.
  • How can this translate into your everyday business interactions? Show people what it would be like to work with you: for example, don’t use the default message on LinkedIn; add a personal touch to everything you do
  • Story makes you stand out from your competitors; it give a glimpse to your prospects of what it would be like to work with you. Your prospects are looking for partners; if you’re just thinking about the sale that may or may not come out at the other end, it won’t work
  • How do you get the most out of your story? First, decide what your story is: stories about who you are, what you do.. what’s your brand’s story? Is it believable? The more you tell you story to yourself, the more it become memorable.
  • Sometimes social media is overwhelming, so choose a handful of people you’d like to connect with. You don’t need to know thousands of people to make a sale, you just need to knock the socks off a handful of people who will hire you or refer you to their network.
  • Make your prospects want to share their story with you: ask questions, then give, give, and give. Send people articles, videos and contacts that they’d find useful. The more you connect people, the more you become a centre for influence.

Further Reading: 

The Story Factor, Annette Simmons

Squirrels Inc, Stephen Denning

Stories That Sell, Casey Hibbard

Made to Stick Chip & Dan Heath

Content may be King, but Without Context, no one Will Pay Attention

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If you’ve seen the hashtags #SMW or #SMWTO floating around Twitter the past few days, that’s because it’s Social Media Week in Toronto. If you want to learn more about Social Media week, click here—there’s still a few free talks that you can register for.

I started my morning typing away at Dark Horse Cafe on Spadina before heading upstairs to the Centre for Social Innovation, where @josh_muirhead headed a talk on the relationship between content and context. As promised, here are my notes ….

  • A lot of content is noise; today, every 48 hours there is more content created than the amount of content that existed before the year 2009
  • when creating content, be brief, be brilliant, be gone: don’t ramble.
  • when writing about products and services, focus on benefits rather than features. Don’t use technical language that your audience won’t understand; instead, use approachable language; if you’re writing about a product (usually B2C) focus on the benefits of that product. If your writing about a service (usually B2B), explain the need that service fulfills.
  • spend the same amount of time on titles as you do on your body paragraphs, because if the title doesn’t hook the audience, the reader won’t continue.. we’re living in a bite-sized content world where people scan and will happily skip over your story if it doesn’t look interesting
  • you are the source of your brand, so no one knows more about it than you, but remember that some of your most valuable content is not created by you; instead, it’s created by the people in your community (brand ambassadors)

Tomorrow, I’ll be at “Advanced Facebook Training,” an event outside social media week hosted by The Social Influence Academy. 

A Morning With Jesse Hirsh

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Social Media Week is already in full swing in Toronto, and this digital diva is attending every event possible. Today, however, I had the privilege of attending a not-so-publicized event entitled “Through the Looking Glass: Embracing New Media Relations” featuring guest speaker Jesse Hirsh.

This guy.

A self-described  “broadcaster, Speaker, Researcher and Strategist.” Mr. Hirsch broadcasts a syndicated column on CBC radio discussing tech trends. He also consults on new media and serves as a member of  MacLaren McCann’s Idea Council.

One of the major points of Mr. Hirsh’s talk today was that we need to develop a social literacy, a shared ability to read and participate in the language of social media. In the spirit of information sharing, I thought I’d share my notes: happy learning….

  • It’s not influence that’s changing; it’s authority. Government once had an authority that commanded the public’s attention
  • social media is about the transition from weak social ties to strong social ties
  • The landscape of communiactions is changing; journalists now have to hussle to keep up with the times
  • we live in an “attention economy”; if you can marshal attention, you’re winning, but that doesn’t necessarily mean you’re using your social power for the good. Lady Gaga is an example of someone who uses her social Klout for activism, such as her anti-bullying campaigning, vs. Charlie Sheen as someone who uses it for the…..uh, not-so-good.
  • social media is the new court of public opinion
  • SEO is a language
  •  these days conversations are shaped by mimetics, or cultural “memes” (like  the “Shit People Say” videos)
  • mapping out your digital audience is a lot like cartography, where you can discover where your message is resonating & where it’s shared
  • As time goes on, it will become even more difficult to reach an audience without malishas, without communicators
  • be critical of social media & analyze its data for manipulation (Stephen Colbert’s “Truthy” project (see more below)
  • we need to develop a shared social literacy, a capacity to recognize patterns and comprehend tools
  • institutions need to foster internal “nerd groups,” i.e., people to keep up with the trends and report back to their colleagues

Further reading / investigating / researching…

Be sure to check back tomorrow, where I’ll be covering a series of events, including this one, which should be amazing: “Tweeting a Business Beat” hosted by the Globe and Mail.

Shit Brands Say … Or Should Be Saying

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“Now that media is increasingly social, innovation can happen anywhere that people can take for granted that we’re all in this together” – Clay Shirky, How Social Media can Make History

 If you haven’t noticed the “shit people say” videos that have populated the internet these past few months, you must be an ostrich: why else would your head be so buried in the sand when all around you the way we consume entertainment media is rapidly transforming?

It all started a few months ago, when this video went viral on the internet:

After immediate success, the creators quickly released a sequel…

…which then sparked a series of immitators, including Shit Black Girls Say, Shit White Girls Say to Black Girls, and Shit Girls Say to Gay Guys. But wait—the videos don’t just rag on women, they mimic every every gener, culture, race, and sexual preference (Shit Guys Say, Shit Persian Guys Say, Shit Gay Guys Say—the list goes on). There’s even location-specific videos (Shit New Yorkers Say, Shit LA People Say),  institution-specific versions (Shit Ryerson Says, Shit U of T Says), and cliche specific renditions (Shit Stoner Girls Say, Shit Hipsters Say)

The point is that we’re not just talking about a few hundred people making a YouTube video, we’re talking about a few thousand people making YouTube videos and a few hundred thousand people watching them. ”Shit People Say” has now become its own genre on YouTube, a kind of cultural channel we tune to in order to see what new content has been added to the conversation.

As someone who spends her days monitoring the internet for great content, I’m fascinated watching this trend sprawl out from a handful of initial videos to an online phenomenon. As I compose this blog, there are not only thousands of ”Shit People Say” videos in circulation, there are also multiple versions of the same meme (for example, I’ve found five versions of “Shit Hipsters Say”, some better than others).

So how impressed was I when I saw that a brand has actively (and successfully) joined the conversation with this video:

The video is titled “Shit Yogis Say”, and it’s hilarious, poking fun at al the stereotypes associated with the new-age yoga child. And who made the video, you ask? Why, none other than  Lululemon Athletica.

Lululemon has long been a leader in Canadian women’s activewear, but now they’re demonstrating that they’re also leaders of the social frontier. What I love about the video is that it’s not heavily branded; we see only a small Lulu logo in the end credits, quite unlike the “in your face” branding of TV commercials or print advertisements. The video is evidence of a successful social campaign by a brand that knows how to insert themselves into the conversation.

Well done, Lululemon!

What does your brand have to say?