who-owns-instagram

Who Owns Instagram? Inside The Facebook Empire

Instagram was acquired by Facebook, in 2012, for a billion dollars. As such, Instagram is now under the Facebook‘s control. Therefore, Mark Zuckerberg is the principal shareholder of the company. When Facebook acquired Instagram in 2012, it promised to keep it as dependent as possible. As of 2018, Facebook asserted control over Instagram. In 2018, Insgrangrm founder left the company.

The Instagram acquisition on a nutshell

Facebook acquired Instagram for $1 billion in 2012. As pointed out by the NY Times at the time “It’s a notable move for Facebook, which has exclusively focused on bite-size acquisitions, worth less than $100 million.”

At the time Facebook wasn’t that strong on mobile, and the move to acquire Instagram made perfect sense from that standpoint. As pointed out by Mark Zuckerberg at the time:

For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

At the time Facebook was committed to leaving Instagram independent:

That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.

However, over the years Mark Zuckerberg took more and more control over th business strategy of Instagram, until its founder left the company, by 2018 as recounted in the Instagram Business Model.

No doubt that by then Instagram had become such an important asset for Facebook that Zuckerberg felt the pressure of asserting more control over it.

By 2018, Instagram would be the primary driver of Facebook revenues (driven by mobile advertising) and a key player in the digital advertising industry.

advertising-industry
The digital advertising industry has become a multi-billion industry dominated by a few key tech players. While the industry advertising dollars are also fragmented across several small players and publishers across the web. Most of it is consolidated within brands like Google, YouTube, Facebook, Instagram, Amazon, Bing, Twitter, and Pinterest.

Following Facebook business model, Instagram is an attention-based business model, which key stakeholders are its power users (the so-called influencers) and its massive user base.

Revenue is generated through selling advertising on the platform.

instagram-business-model
Instagram makes money via visual advertising. As part of Facebook products, the company generates revenues for Facebook Inc. overall business model. Acquired by Facebook for a billion dollar in 2012, today Instagram is integrated into the overall Facebook business strategy. In 2018, Instagram founders, Kevin Systrom and Mike Krieger, left the company, as Facebook pushed toward tighter integration of the two platforms.
facebook-business-model
Facebook is an attention-based business model. As such, its algorithms condense the attention of over 2.4 billion users as of June 2019. Facebook advertising revenues accounted for $31.9 billion or 98.66% of its total revenues. Facebook Inc. has a product portfolio made of Instagram, Messenger, WhatsApp, and Oculus.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which target is to reach over two million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get in touch with Gennaro here