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Summary:

With its own Camera app and, now, Instagram too, Facebook essentially controls both the public and private social graphs for mobile photo sharing. And, given how much we love taking and sharing pictures, that means Facebook has huge commercial opportunities in this space.

From the early days of the commercial web, one thing has been clear: photos are big on the Internet. All of us love photos. We love taking photos. We love sharing photos. They are the basic unit of digital emotion. Facebook understood this early on, and knew that when combined with its social graph, photos could be their one-way ticket to unending engagement and thus commercial success. Instagram was attacking Facebook’s Achilles’ heel — mobile photo sharing – so they bought the company, for a billion dollars. And in doing so, Facebook has pretty much won the war for mobile photo sharing.

When the news broke this past weekend that picplz, a mobile photo sharing app and service, was shutting down, it was a rude reminder of the Darwinian nature of the mobile app landscape. And picplz isn’t going to be the only mobile photo app to vanish into the mists of time. The reason for their misfortunes is none other than Facebook.

Picture Perfect

There are two main reasons why Facebook is a dominant Internet company. One, it is the first cross-platform and truly global identity provider. Second, it is the most constantly updated photo album on the planet. That is why photos are Facebook’s lifeblood.

Photos are the reason many of us continue to engage with Facebook. Facebook has tried many verbs to increase and maintain our engagement with the service – read, listen, watch. But in the end, it’s the photos that work wonders for the Mountain View Menlo Park, Calif.-based social-networking giant.

One of the biggest (and many) shortcomings of Facebook’s mobile app  is that it wasn’t simple enough for us to snap photos, share them and engage around them. Instead, what we got was a tired, convoluted little app. Facebook being Facebook knew that and had been quietly working on a mobile photo-sharing app called Camera that currently works on the iPhone.

The release of the Camera app came a few weeks after Facebook announced that it was going to acquire Instagram for about $1 billion in stock and cash. While many were confused as to why Facebook would have two mobile photo apps, in reality, it is a masterful move by Mark Zuckerberg & Company. Let me explain.

Private + Public Partnership

Facebook’s Camera app is a useful tool for seeing, sharing and interacting with photos that are part of your private social graph. Sure, you can share them publicly, but the app is meant to capitalize on our personal and private social graph. With nearly 900 million subscribers, Facebook is pretty much a giant here.

Buying Instagram brought Facebook access to the public graph. Instagram is more like Twitter thanks to its “follow” model. If your account is public, anyone can follow you, but you don’t need to follow them back. Instagram has grown rapidly to over 50 million people mostly because of this asynchronous model. Thus, when it comes to mobile photo sharing, Facebook now owns both private and public graphs and, as such, is on its way to dominating the mobile photo-sharing market.

In order to understand Facebook and the role photos play for the service, check out these stats:

  •  In August 2011, there were over 250 million photos uploaded each day
  • On average more than 300 million photos were uploaded to Facebook per day in the three months ended March 31, 2012.

The NPD Group estimates that in 2011 smartphones accounted for about 27 percent of all photos and videos we snapped, up from 17 percent in 2010. Now imagine when there are many more easy-to-use smartphones out there. Photo overload! And Facebook currently is one of the few companies that has the scale and size to store that many photos — an advantage that cannot be dismissed or overcome easily.

The New York Times art critic wrote a wonderful essay, Everyone’s Lives, in Pictures (I wrote something similar last year) where she quotes  Susan Sontag as writing:

“Needing to have reality confirmed and experience enhanced by photographs is an aesthetic consumerism to which everyone is now addicted.”

In the time of Facebook, that message is amplified. And the best is yet to come, some experts say.

Twitter vs Photos

As Facebook has shown, people love engaging and interacting with photos more than simple text. With Instagram, Facebook can start to take some attention away from Twitter, and that can’t be a good thing for the San Francisco-based company.

I am always confounded that Twitter hasn’t built a Twitter-only photo sharing app and instead has chosen to work with third parties for photo sharing. It is a mistake that can come and bite them later in their life. I would argue that in time, Instagram’s public graph can become as big–if not bigger–than Twitter itself. Like I said, there are more people likely to share and like photos than write tweets.

As I said earlier, if you look beyond Facebook and Instagram, if you look at the recent success of Pinterest, you know that pictures are big on the Internet. Why? Because we all love photos. Everyone can take photos and share them with their friends. Photos are meant to elicit emotion. And they are inherently social.

Unfortunately, that was a lesson not learned by Google and Yahoo, both of which had opportunities to turn their successful photo-based web properties into the beginnings of a social revolution. Google owns Picasa, while Yahoo owned Flickr, arguably one of the most influential web companies of the post dot-com era. Today’s social behaviors, the emergence of community, usage of meta-tags, a simple “follow” model and, of course, social validation were some of the key contributions of Flickr to the web.

Gizmodo, in a recent post, outlined how Yahoo mismanaged Flickr. (Thomas Hawk, a longtime member of Flickr, has a wonderful, if somewhat less read, response to the Gizmodo story that is worth reading.) If Flickr had embraced the post-iPhone mobile, Yahoo might have owned the mobile photo opportunity. Ironically, pre-iPhone, when Nokia was well known for its camera phones, Yahoo/Flickr were a pretty big deal in the mobile. But that is the way of the big companies — there is a desire to boil the ocean and build a big solution when the actual opportunity is right under their noses.

For Facebook, photos are no joke. The company will do whatever it takes to keep us engaged with photos. And as for other also-ran photo services, the reality is that like picplz, they will not even be footnotes in the history of technology.

  1. Zorlac Realm Friday, June 8, 2012

    I don’t understand why Google did not create a mobile version of their Google+ photo creative kit and make it simple to use. That would be much more of a killer mobile photo app than Facebook+Instagram combine

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    1. …that is because making things simpler is not as much fun as “boil the ocean” approach that big companies often likes to take. :-)

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    2. Google wants to take the natural flow of data and deliver based on relevance where as Facebook wants to coax you into drawing attention from “friends” and trap you in their own realm. I trust Google more than I trust Facebook.

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  2. Charles Baker Friday, June 8, 2012

    “But in the end, it’s the photos that work wonders for the Mountain View, Calif.-based social-networking giant.” …Menlo Park….

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    1. And even Palo Alto before it.

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    2. Damn… sorry about that.

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  3. On the public vs. private distinction, are you saying that (i) Facebook is hedging its bets as to whether the public will choose public vs. private or (ii) people will choose between the two apps before taking a picture based on how they want to share? Perhaps (iii) none of the above?

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    1. No I am not saying that. It is essentially owning both graphs and has done a bear hug on the market in a way that allows them to carry on dominating the photo business.

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      1. Overreaching ambition always stumbles and crashes at some point.

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      2. Tony Christian Tuesday, June 12, 2012

        The government has not yet approved the merger. I am hoping the much tougher European Competition Commission looks into Facebook’s buyout of Instagram on anti-trust grounds. Facebook already is a monopoly, we all dont want to see that extended through a buyout. Facebook should have to compete with Instagram.

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    2. Rich

      I apologize in advance, but I don’t get your point. Can you kindly elaborate?

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      1. Whenever an entity believes they’re superior to everyone else and they’re going to dominate a market, a country, or the world, they may make large waves for awhile, but their own arrogance eventually causes them to fail, often in a spectacular way.

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        1. Rich

          I don’t think they believe they are superior. they just are the biggest and trying their best to make sure they don’t lose that position.

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  4. Narendra Rocherolle Friday, June 8, 2012

    Om, I think that Facebook has great market share now for closed and open/mobile communities that use photos as an engine. But photos really are one of the content engines of the global network and will never be totally dominated by one player because there are so many use cases. This has been clear since 1999.

    Case in point, both Tumblr and WordPress traffic in extraordinary numbers of images. eBay still does huge volumes as part of the sales cycle. Pinterest has blown open a whole new opportunity.

    It may be that Instagram is the first expression of fast emerging “hit” communities that we could see a lot of in the future and focus on photos/video.

    There are also lots of other photo sharing use cases that will be default behaviors/services over the next 5+ years!

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  5. Facebook, Instagtam capture only part of the public conversation.

    Therefore not all photos “share well” (diffuse) there.

    Game is not over yet.

    Real-life conversations ultimately the most important, long-term piece to build into.

    With that said, this analysis kicks ass and it’a why Om is the best in the biz.

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  6. Drew Olanoff Friday, June 8, 2012

    The service that has the most eyeballs to see the photos will win the photo service wars. Facebook has 901M sets of eyeballs. It wins.

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  7. Bhanu Sharma Friday, June 8, 2012

    great analysis Om! The public + private insight is so true, and users tend to share their pictures constantly between those two spectrums. Facebook has to dominate both and they certainly will.

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  8. yes.

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  9. Kanishk Parashar Friday, June 8, 2012

    How does the plain old Apple Camera app on iOS play into all this? I am just wondering cause I tend to use that one the most. You can also tweet from it :-).

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  10. Right, because everyone wants their photos to be public… NOT

    Om Mallik is a facebook fanboy, fails to see risks in this strategy. G+ photo management is much better, back up to private, share what you want with whom you want.

    Facebook cannot do that since that would be costly (more pics) and less page veiws and Ads.

    Reading Om’s posts, I wonder if he has any incentive to make his analysis sound bullish on facebook…investments.. options.. friends?

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  11. Vivek Bhatia Saturday, June 9, 2012

    I’m getting a little tired of the amazing business opportunities that lie in Facebook’s future. Wake me up when one of them materialises in its present.

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  12. Richard F Talley Saturday, June 9, 2012

    Whether it be iOS or Facebook, To say one company has “won the war” would suggest that innovation is over. I’m sick of all the the this company won that, its a little early in the digital age to be making claims of who won what . Maybe in 25 more years we can say who won

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  13. Looking purely from the perspective of user base any idea who has more users? FB, Google , Yahoo or MSN?

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  14. Richard Torcato Saturday, June 9, 2012

    Whoa! I’ll have whatever your drinking.

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    1. Water. Would you like some.

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  15. Armand Konan Saturday, June 9, 2012

    We all know why Facebook bought Instagram but I’m still wondering why Instagram accepted?

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    1. A billion reasons I guess :-)

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  16. This makes a lot of sense, however, I’m still unclear how any of this is going to result in revenue…are people really going to happy having ads shoved into their photos?

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    1. Allen

      I think Photos are the lure/hook. As long as they keep coming back to see the photos, Facebook has an opportunity to either show them ads or sell whatever else it is cooking up.

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  17. Dave Linabury Monday, June 11, 2012

    “They are the basic unit of digital emotion.” THAT is a brilliant observation, Om.

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  18. Om, great piece as usual, but curious as to your thoughts on today’s WWDC photo stream announcement and to what extent Apple seems to be creating it’s own graph taken together with all of the other announcements today – card, maps, etc.

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  19. Bill Richards Monday, June 11, 2012

    The FTC/SEC should absolutely block Facebook from buying one of its strongest competitors — Instagram. Instagram is a photo based social network that now has 40,000,000 users. its one of the strongest competitors facebook has seen to date. Facebook has network effects. Without network effects Mark and Co. would have had strong competition a long time ago. Instagram is one of the few companies that found a hole in Facebook’s armour through its early jump on mobile platforms. It would be a shame to simply watch Facebook buy away the competition. Do the right thing FTC/SEC and block the buyout. Make Facebook compete.

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  20. Most of the images I post on FB are throwaway pictures that I wouldn’t post anywhere else (e.g. on Flickr), that have no value beyond real-time.

    So – no, I don’t think FB rules mobile photo sharing (and yeah, I do know they igest 500TB of new content each day).

    Facebook is nothing more than a giant temp folder in that regard.

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