Original link: http://techcrunch.com/2012/04/09/facebook-to-acquire-instagram-for-1-billion/

Shiv Vashisht’s blog link: https://blogs.ubc.ca/shivvashisht/

It was actually quite staggering to find out that Instagram was worth so much money even in 2012 where the app was although popular, relatively new and upcoming. In recent times everyone has heard of the app from the old to new generation. It serves multiple purposes from passionate photographers showing their art, promoting events through #hashtags, and simply small things like showing your friends what you ate for dinner.

The add-free app really highlights how apps don’t necessarily need to gain revenue through advertising but can generate revenue through its usefulness and community. Facebook has successfully capitalized on this app’s huge customer base by linking it with Facebook. As users update their Instragram photos the photo also has the option to be shared through Facebook. This has the a double effect where Facebook users who see posts of Instagram photos also download that app, vice versa and is exactly what I did.

Shiv is correct in saying that at its launch Instagram under Porter’s generic strategies was a product of differentiation. It emphasized that popularity through differentiation will lead into other firms in building upon similar ideas. I feel that without the success of Instagram other apps such as Snapchat that relies on mainly taking photos would have not been developed. The concept of social media through only photographs seemed strange to me at first because social media sites like Facebook, and MySpace have the option to share photos as well. Hence, making Instagram seem not very useful.

Under my analysis I feel that their key to success came through the blow-up of the #hashtag that links one photo to many others or creates trends like #throwbackthursdays giving people a common topic to post about.