Instagrams Relationship with Facebook

Many might have not known that Instagram has become Facebook’s largest acquisition which has helped increase Instagrams popularity substantially. On April 2012, Facebook acquired Instagram for approximately US$1 billion in cash and stock. Facebook believed that Instagram was creating a lot of buzz but had no real business model so its main focus was to commit building and growing it. Before Facebook’s acquisition, Instagram had used Foursquare API to provide named location tagging. Foursquare is a mobile app integrated with local search and discovery service to provide tailored experience for its users. However, after Facebook’s acquisition, Instagram switched to using Facebook places instead which is a feature of Facebook that allows users to “check in” in order to see a friend’s location at the moment. What seemed to be fascinating the most between Facebook and Instagram was the idea that the correlation of the two has compromised one to grow quicker than the other.  After the acquisition, Instagram grew by 23% while Facebook only grew by 3%. The difference in growth has been formulated mainly due to Facebook realizing how popular Instagram was getting and making sure to take full advantage of the market share.

Reference: http://en.wikipedia.org/wiki/Instagram