Facebook paid nearly $1 billion for Instagram because its growth was seen as a long-term threat to Facebook especially among tweens and teens. Now Facebook wants to pay for the acquisition and boost mobile revenue.
- Instagram can share information about its users with Facebook, its parent company, as well as outside affiliates and advertisers.
- You could star in an advertisement — without your knowledge.
- Underage users are not exempt.
- Ads may not be labeled as ads.
- Want to opt out? Delete your account.
I’ve excerpted the “headlines” but you can see the new provisions explained in more detail in their piece.
There is no question that Facebook will be forced to roll back some of these changes. Right now the company watching to see how outraged people get and how many defections occur. Many of these new changes will have to be modified — either because of the backlash or because of swift FTC intervention.
Flickr and Twitter have implemented Instagram-like features and some number of current Instagram users will migrate to those services. Younger users may switch to Snapchat as an Instagram alternative (or perhaps ironically to Facebook itself). Indeed, Facebook is already building a Snapchat-like capability because of the service’s rising popularity.
But a larger issue that this controversy once again raises is: the “perishable” nature of Internet businesses. MySpace is the poster child; more recently so are Zynga and Groupon. But Instagram could be next: super-hot one year, in decline next year.
These businesses are big and but also fragile — and fickle, short-attention-span users have plenty of alternatives. Indeed, social media sites are all about “the party.” And once the party cools down or “becomes a drag” the exodus can begin or accelerate.
Update: From the “it’s better to ask for forgiveness” school of management, Instagram is already backtracking — although spinning that many of the complaints and criticisms were merely misunderstandings.