Facebook’s acquisition of Instagram is one of the biggest in the social media space to date.
Facebook has purchased companies in the past, but this acquisition is completely out of character for them. Facebook is known for their internal focus of growing products and not buying them.
What could have caused Facebook to make such a bold move?
The answer is mobile commerce. The business of m-commerce and e-commerce are continuing to ascend and these are areas where Facebook is considered to not have a tough presence. Instagram already has a strong mobile presence, and before becoming available for Android last week, the app was already on over 25 million iOS devices. With Facebook purchasing Instagram for a billion dollars, they turned a weakness into strength overnight.
In 2011, Gartner Technology stated that “smartphones and tablets represent more than 90 percent of the new net growth in device adoption for the coming four years.”
Consumers are turning to mobile devices and apps instead of search engines to purchase products and services. If Facebook can develop a way to monetize Instagram, it can give them a strong mobile strategy for the future and assure them of continued growth.