Introduction
Confinement of photographs to a square silhouette was unheard of until Instagram emerged. Instagram is an online service that facilitates photo-sharing and social networking. It allows users to take pictures, filter them using digital filters, and then share them on social networking sites of their choice.
Company background
The advent of Instagram brought a new experience for social networking enthusiasts. Kevin Systrom and Mike Krieger developed it in 2010 to improve social networking (Lux, 2010). The service was originally unavailable to many people because it was limited to the iPhone, iPad, and iPod touch only.
At the time, it had very few users. However, after adapting it for use in Android operating system in 2012, its popularity rose. Statistics showed that Instagram users increased to 100 million in 2012 after its introduction to the Android operating system (Lux, 2010).
After its adoption for android, more than 1 million users downloaded Instagram on the first day. In April 2012, Facebook acquired it at a price of approximately $1 billion dollars.
Industry background
The social networking industry has grown tremendously for the last few years. Each entrant tries to develop unique services that will guarantee its dominance on the market. Some dynamics of the social media include ranking and content (Lux, 2010).
It is important for participants to possess knowledge on the strategy used by competitors in order to develop a strategy that will facilitate dominance and competition.
In addition, content is important. This includes what is on offer, its quality, value, variety, amount of activity, and its effectiveness (Lux, 2010). These aspects determine success in the industry.
E-business/ IT background
Instagram is unique from other photo sharing and social networking sites because of its technology. It mainly focuses on photo sharing. Instagram uses a combination of SQL and NoSQL technologies and open source applications.
Mai technologies include an operating system, load balancing, WSGI, data storage, task queue, and monitoring (Lux, 2010). Other technologies used include Sentry, Pingdom, PagerDuty, Gearman, Pyapns, and Vmtouch among others.
Analysis
Instagram is facing several challenges. First, there is stiff competition from other photo-sharing services. These include Pixlr-O-Matic, PicPlz, Hipster, and StreamZoo (Henry, 2012).
Secondly, their new privacy rules will make it less appealing than it was before acquisition by Facebook. Instagram can now sell users’ photographs to third parties without the consent of users.
Thirdly, better services have been developed that provide better services than Instagram. For example, Pixlr-O-Matic has 68 digital filters while Instagram has 18 (Henry, 2012). In addition, it has additional features that Instagram misses. This makes it more appealing than Instagram.
Instagram is a highly feasible idea comparing its success after its launch. Currently, it has over 100 million users. Instagram possesses ability to generate revenue. For example, it recently diversified its services to include a product that enables users to view feds on the web (Henry, 2012).
This has made assess to user content easier, an opened an avenue for Instagram to make money. Instagram has more opportunities to generate revenue through advertisements even though it does not generate any revenue currently.
Its business model is based on the fact that people love images and might spend a lot of time on the internet. This will give advertisers opportunity to market their brands.
Recommendation
Instagram is an excellent service that has a bright future. It does not currently generate revenue but with new products under development, it will start generating income soon. Even though alternatives such as Pixlr-O-Matic, PicPlz, Hipster, and StreamZoo exist, they are not as popular as Instagram (Henry, 2012).
Its 100mmillion users imply availability of more opportunities for investors. This makes it a viable business that people should invest in.
Conclusion
Instagram is one of the e-business start-ups that have taken the world by surprise. Instagram allows capture and sharing of photographs on social networking sites. Since its acquisition by facebook, many things have changed that will affect it prominence.
Its new privacy rules are unappealing and may affect its popularity. Instagram is a viable start-up business that has a bright future despite stiff competition.
References
Henry, A. (2012). Don’t bother with Instagram: here are some better alternatives. Web.
Lux, K. (2010). What’s Instagram and why is it so popular? Web.