Week 2 BOC: Instagram

Facebook has purchased Instagram for the price of 1 billion dollars in order to use the most popular photo sharing app on their website.  This is so that people who will have more reason to use Facebook or continue to use it even more giving the company a chance to generate more revenue for itself.  “Instagram is a free photosharing application that allows users to take a photo, apply a digital filterand share it on a variety of social networking services.” The company has more than 30 million registered users and is less than two years old and has minimal revenues.  The reason why they want to keep Instagram unchanged is so that no gives the opinion that Facebook is trying to change it benefit them or confuses their existing customers on what they already know about Instagram.  The social network is acquiring a software company that lets people apply filters to photos they snap with their mobile devices and share them with friends and strangers.“Facebook chief executive officer Mark Zuckerberg emphasized thatthey would not change Instagram in a significant way. “  Instagram's fans, brand recognition and its potential are difficult to put a price tag on. Yet Facebook has — and can afford it. The company is preparing for an initial public offering of stock that could value it at as much as $100 billion in a few weeks. What's $1 billion? A drop in the bucket, really.  “Getting Instagram is a big win for Facebook as it works toharness people's growing obsession with their mobile devices and sharing everymoment of their life. The company's own mobile application is not as easy touse as Instagram, and sharing photos can be downright clunky. Facebook's way,noted Pachter, has always been to buy technology if it's better than what itcan build on its own.”