“Facebook Gets More Data”

Matthew Panzarino has a great take on today’s Instagram + Facebook news:

Facebook doesn’t need Instagram to make money. Instagram will probably never get ads.

I think it’s a win for everyone. Now Instagram doesn’t have to shoehorn a monetization model it would hate —and you would hate — into its service in order to survive. The users get a better experience. Facebook gets more data. Users that are quitting Instagram because the service may be ‘ruined’ are barking up the wrong tree. Facebook sees the value in the network as it is, a photo creation machine with a lot of user love.

While mobile ads could be a huge deal long-term speaking, it is true Facebook doesn’t “need” Instagram to make money right now. For a company as large as Facebook, this kind of acquisitions can be put on hold from a business perspective, to see how things evolve once users figure out they are effectively using a Facebook product. But you can’t put off the mobile explosion – it’s only going to get bigger – and can Facebook afford to miss out on “mobile advertisements done right”? What if someone else figures out a way to monetize millions – soon billions? – of users sharing photos from their smartphones?

It’s a good problem to have. And I agree that access to more data (patterns such as likes matched with photo captions, for instance, or location) is what matters for now. Let’s check back on ads and mobile monetization in six months.

More Instagram + Facebook coverage here.