Home > Strategy > What does Instagram & Tagtile acquisition mean for Facebook?

What does Instagram & Tagtile acquisition mean for Facebook?

About a week back, the world woke up to the news of Instagram being acquired by Facebook for, an unbelievable amount of, $1 billion. A couple of days later, Facebook made another, much smaller, acquisition of Tagtile.

Why would Facebook spend a billion dollars on a start-up that has almost no revenues and has yet to celebrate its second birthday?

Many were surprised and asked, why would Facebook buy an app, that just turns the colors of your photos a little weird and posts them online. A year ago, when I first heard of Instagram, it was valued at $100 million and when it closed the latest round of funding, it was valued at $500 million. And, yes about a week later, Facebook bout it for twice that valuation.

Innstagram managed to garner 30 million users, despite being available only for iPhone users. Now that the app is available for Andriod users as well, it will blast past 50 million mark soon.

Let’s face it, Facebook is the biggest platform for people across the globe to share photos online- with millions of photographs being shared every day (yes, every day!). Where as Facebook and Instagram both are photosharing platforms, Instagram also has the advantage of  ‘mobility’- which Facebook lacks. With the booming sales of smartphones and availability of high speed mobile data networks across the globe, mobile platform is the future of social media. And, Instagram was doing it right! So, the $1 billion valuation of Instagram is justified keeping in mind the returns it will bring in the future.

And, why Tagtile?

Tagtile is an application where the commercial establishments can keep their customers engaged with the help of Loyalty programs, through their smartphones.  With more and more commercial establishments getting on to the social commerce bandwagon, it made sense for Facebook to buy Tagtile and catch up to speed with social commerce.

  1. August 7, 2013 at 12:51 pm

    Hello there! This is my first comment here
    so I just wanted to give a quick shout out and say I really enjoy reading your blog posts.

    Can you recommend any other blogs/websites/forums that cover the same
    subjects? Many thanks!

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