Instagram: Does It Matter That It Will Make Money on Your Pics?
Another option would have been to create some kind of image selling service à la iStock Photo or Getty Images. In theory this sounds reasonable, but that would have required developing a an entirely new front-end Web presence to sell the photos, not to mention tons of marketing, lots of time to organize and classify the content, working out how the royalties would work, and so on. In other words, it would have been like starting a new business. After acquiring Instagram for $1 billion, do you think Facebook wants to tool around trying to experiment with a new business for this firm? No way.
The third option is selling targeted advertising, which is frankly a no brainer. Why is that? For starters, the model has already been proven by Facebook, which has made an art form out of monetizing on user generated content and lots of eyeballs. During Q3 2012, Facebook reported $1.3 billion in earnings, up 32 percent from the same period last year. Furthermore, seeing as Facebook is the parent company, it has a prebuilt and tested advertising infrastructure, not to mention trained and effective sales staff, ready to bring the product to market.
The way I see it, this option was a foregone conclusion the moment the ink was dry on the deal with Facebook earlier in the year. It was only a matter of time. So, still unhappy with Instagram's decision? All I can say is if it bothers you so much, you should have left back in September when the service was officially acquired.
If you have any comments you'd like to share, please let me know in your comments.
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Rio Longacre is a Sales & Marketing Professional with more than 10 years of experience in the direct marketing trenches. He has worked closely with businesses across many different vertical markets, helping them effectively leverage the use of data, personalization technologies and tracking platforms. Longacre is currently employed as a Managing Consultant, Marketing, Sales & Service Consulting at Capgemini Consulting, a premier management consulting firm. He is based in the company's New York City office, which is located in Midtown Manhattan. He has also previously worked as an online media buyer and digital marketing strategist.
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