Facebook Doesn't Own Instagram; They're Competitors
Dec 27th 2013 11:50AM
Updated Dec 27th 2013 11:52AM
When Facebook bought Instagram for nearly a cool billion dollars, the social-media world seemed to "like" the decision. However, nearly two years after the deal, Facebook still hasn't monetized this venture.
Even worse, it is increasingly looking like Instagram is becoming a competitor. A recent EU study on social media confirms this trend: UK teens aged 16-18 are embarrassed to be associated with Facebook and are moving to "more hip" social media sites -- including, you guessed it, Instagram.
This puts Facebook in a tough situation. Right now, they derive no direct benefit from Instagram's existence and are actually harmed by cannibalization as it grows. These are the hallmarks of a competitor, not a business unit.
Of course, this could change with the effective monetization of Instagram users. Compared to Facebook's monetization of over $4 per account, that number is currently $0 from Instagram. However, this is easier said than done, Instagram users have already pushed back against a change of terms in the past and seem to be more resistant to change than Facebook users.
In today's video, Jamal Carnette talks Facebook and Instagram.
Not Facebook, but all social media investors should know this stock
Opportunities to get wealthy from a single investment don't come around often, but they do exist, and our chief technology officer believes he's found one. In this free report, Jeremy Phillips shares the single company that he believes could transform not only your portfolio, but your entire life. To learn the identity of this stock for free and see why Jeremy is putting more than $100,000 of his own money into it, all you have to do is click here now.
The article Facebook Doesn't Own Instagram; They're Competitors originally appeared on Fool.com.Jamal Carnette owns shares of Facebook. The Motley Fool recommends Facebook. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.