What’s in Store for Instagram?

It has been a big couple of weeks for Instagram. It launched on Android to a very warm reception – over five million downloads in six days – secured $50 million in funding, and then was purchased by Facebook for $1 billion (yes, with a B). That’s a lot of goings ons for a free app that just recently went multi-platform and isn’t even in its terrible twos.

But no matter what you think of the acquisition itself, there’s no denying that a lot can, and probably will, change for Instagram and its community over the coming months. Here I’m going to speculate a bit on what those changes may be.

I should note that I’m of the opinion that acquisitions are where startups go to die. I’ve seen it too many times: a website or app gets very popular, and instead of building a competitor, a bigger company will buy it, steal the programmers, and lay the original app to waste. Delicious is the perfect example of that. When Yahoo! bought it, they ruined it. The same thing goes for Flickr, which could have been the number one photo-sharing site with the proper care. Our beloved Google is even guilty of it (Jaiku, Aardvark).

I’m very worried that Facebook might just kill off Instagram, either purposefully, or without realizing it. However, a company doesn’t just pay a billion dollars for a startup to kill it; especially one that isn’t even making money.

I think it’s preposterous that Instagram, which is a pre-profit company, would go for anything close to $1 billion, but that’s a story for another time.

So what does the world’s number one social network have in store for what is currently the world’s number one iOS app and a very popular Android app? The public isn’t really sure, but I have a few thoughts on the matter.

Tight Facebook Integration

This is a no-brainer; there will definitely be better cohesion between Facebook and Instagram. I’m guessing we’ll see better posting (for me at least, Instagram leaves out some information when posting to Facebook). Heck, photos might even get a title besides “Photo”. We might also see the ability to tag friends right from Instagram. To take it one step further, users will probably be able to combine their Instagram and Facebook profiles, or new users may not even need to sign up for Instagram – just connect through Facebook. Those would all benefit Facebook, as well as being nice additions to Instagram. This is a two-way street, though.

We could also see some interesting changes on Facebook’s end. Imagine all Facebook users having the ability to add filters to their photos right from the Facebook app or web-based uploader, for example. Facebook might also integrate some of Instagram’s discovery methods into their own app. Remember: Instagram is, for all intents and purposes, a public photo sharing app. Facebook’s photos are less for sharing with the public and more for sharing with friends. Facebook will definitely find a way to leverage that aspect of Instagram.

Speaking of leverage, Facebook shelled out $1 Billion for Instagram. I wonder…

How Will It Make Money for Facebook?

You didn’t think Facebook shelled out that money out of the goodness of its heart, did you? Admittedly, part of the reason was to remove a competitor from the market. But if the powers that be thought Instagram was going to cost them $1 billion in competition, they had to have some idea about how it would make money, right?

It’s pretty well known that Facebook makes money off of highly targeted ads, which it can display because of data-mining. Instagram gives them another angle to gather data.

I think it’s fair to say that Facebook will probably replace Foursquare with its own check-in functionality in Instagram. This will allow Facebook to grab locations for millions of pictures they otherwise wouldn’t have access to. This can allow for location-based ads as well as the ability to draw some conclusions based on use – things like, “a lot of people take pictures in this area.”

Some functionality that Facebook doesn’t have at all is the ability to use hashtags with images. Facebook could definitely make some assumptions about what photos are tagged with – things like interests, or ways to categorize those images. This is just more information that could be fed to Facebook’s big ad machine, as well as information that can be associated with our account. If I tag a photo with #cigars, Facebook will know I have an interest in cigars.

Not to freak you out or anything.

Regardless of what Facebook could use Instagram for, there is one burning question that a lot of people are probably asking.

The Big Question

Will Instagram remain a stand-alone app?

This is a reasonable thought to have, and it could go either way. The Facebook mobile app could “eat” the Instagram app, combining the functionality of both apps into one super app, or Facebook could keep Instagram separate. The smart money says they’ll do the latter.

Instagram is giving them access to people who may not have or use Facebook. It’s also giving them another avenue to make money; one that at this point is a completely separate avenue. I think it would be pretty wise to do some light integration, like what I talked about early on in this article, but overall, let Instagram be. Combining the two apps would probably result in the loss of a lot of Instagram’s users.