Facebook releases Camera: What’s the logic? →

Nick Bilton for the NY Times:

It might seem strange for Facebook to release a camera application with built-in filters just weeks after announcing plans to buy Instagram, the social photo app. But Facebook Camera is aimed at a different audience. Instagram has 40 million users, while Facebook has 900 million. This leaves a large swath of people who are not on Instagram but are actively taking photos and uploading them to Facebook. The filters in Facebook Camera were developed by Facebook and are not borrowed from Instagram.

When I read the first tweets this morning announcing Facebook Camera, I was surprised.

Facebook bought Instagram about 1.5 months ago. It is sure that the Camera app was in the pipeline at that time. Zuckerberg knew what Facebook was up to and the potential of this new app, which is, let’s be honest, a clear attempt to take on Instagram.

Pundits have explained Zuckerberg’s move by the threat Instagram represented. Facebook made its success on photos, but had no decent mobile photography app. People were then using Instagram to share photos with their friends instead of Facebook, which means less visits to Facebook.com and therefore a threat to its business model: advertising.

But, if you know you have an app in the pipes and a user base of 900 million people what’s the logic behind Instagram’s acquisition for $1 billion?

I’m not even sure that buying the users makes sense. Facebook is likely to reach 4 million users way faster than Instagram did.

Maybe Facebook actually bought the talents at Instagram to finish up their app. Maybe.

My theory is that Zuckerberg decided to show future investors how strong Facebook was. I think he did a pre-IPO exploit to increase investors’ confidence. Many were criticizing the lack of mobile strategy and Facebook’s future. These were threats to the success of the IPO.

I think Zuckerberg successfully showed that Facebook was still bold. He communicated that his leadership was prominent. It made investors believe a bit more in Facebook’s future and resulted in astounding demand for Facebook shares.

Nevertheless, now that Facebook has two different apps with the same function, what is the next step? Shut Instagram down.