Instagram is an online photo-sharing, video-sharing
and social networking service that enables its users
to take pictures and videos, apply digital filters
to them, and share them on a variety of social networking
services, such as Facebook, Twitter, Tumblr and
Flickr. A distinctive feature is that it confines
photos to a square shape, similar to Kodak Instamatic
and Polaroid images, in contrast to the 16:9 aspect
ratio now typically used by mobile device cameras.
Users are also able to record and share short videos
lasting for up to 15 seconds. Instagram was created
by Kevin Systrom and Mike Krieger and launched in
October 2010.
The service rapidly gained popularity,
with over 100 million active users as of April 2012. Instagram is distributed through the Apple App Store,
Google Play, and Windows Phone Store. Support was
originally available for only the iPhone, iPad,
and iPod Touch; in April 2012, support was added
for Android camera phones. Third-party Instagram
apps are available for Blackberry and Nokia-Symbian
Devices. On October 22, 2013, during the Nokia World
at Abu Dhabi, UAE, Kevin Systrom has confirmed that
official Instagram app for Windows Phone will be
available in the coming weeks. On November 21, 2013,
the official Instagram Beta for Windows Phone has
been released to Windows Phone 8 to allow Windows
Phone user to get faster access to Instagram services
although the app is still under development with
lack of video recording and capture image through
app. The service was acquired by Facebook in April
2012 for approximately US$1 billion in cash and
stock.
In 2013, Instagram grew by 23%, while Facebook,
as the mother company, only grew by 3%. Instagram
began development in San Francisco when Kevin Systrom
and Brazilian Michel "Mike" Krieger chose to focus
their multi-featured HTML5 check-in project Burbn
on mobile photography. The name "Instagram" is a
portmanteau of "instant camera" and "telegram".
On March 5, 2010, Systrom closed a $500,000 seed
funding round from Baseline Ventures and Andreessen
Horowitz while working on Burbn. Josh Riedel joined
the company as Community Manager. Shayne Sweeney
joined in November 2010 as an engineer and Jessica
Zollman was hired as a Community Evangelist in August
2011. In January 2011, Instagram added hashtags
to help users discover both photographs and each
other. Instagram encourages users to make tags both
specific and relevant, rather than tagging generic
words like "photo" in order to make photographs
stand out and to attract like-minded Instagrammers.
In September, version 2.0 went live in the App Store
(iOS).
It included new and live filters, instant
tilt–shift, high resolution photographs, optional
borders, one click rotation and an updated icon.
On February 2, 2011, it was announced that Instagram
had raised $7 million in Series A funding from a
variety of investors, including Benchmark Capital,
Jack Dorsey, Chris Sacca (through Capital fund),
and Adam D'Angelo. The deal valued Instagram at
around $25 million. On April 3, 2012, Instagram
for Android phones running the 2.2 Froyo version
of the OS was released and it was downloaded more
than one million times in less than one day. That
same week, Instagram raised $50 million from venture
capitalists for a share of the company; the process
valued Instagram at $500 million. In the next three
months Instagram was rated more than one million
times on Google Play and was the fifth app ever
to reach one million ratings on Google Play—as of
April 2013, it had been rated nearly four million
times.
In its largest acquisition deal to date,
Facebook made an offer to purchase Instagram (with
its 13 employees) for approximately $1 billion in
cash and stock in April 2012 with plans to keep
the service independently managed. Britain's Office
of Fair Trading approved the deal on August 14,
2012 and on August 22, 2012, the Federal Trade Commission
in the United States closed its investigation, allowing
the deal to proceed. On September 6, 2012, the deal
between Instagram and Facebook officially closed.
On April 12, 2012, Facebook acquired Instagram for
approximately $1 billion in cash and stock. The
deal, which was made just before Facebook was scheduled
to go public, cost Facebook about a quarter of the
cash-on-hand they had as of the end of 2011. The
deal was for a company characterized as having "lots
of buzz but no business model", and the price was
contrasted with the $35 million Yahoo! paid for
Flickr in 2005 a website which has since become
among the 50 most popular in the world. Mark Zuckerberg
noted that Facebook was "committed to building and
growing Instagram independently", in contrast to
its common practice of, as CNNMoney.com put it,
buying "hot startups, killing their products, and
redeploying their staff on other projects." According
to multiple reports, the deal netted Instagram CEO
Kevin Systrom $400 million based on his ownership
stake in the business. The exact purchase price
was $300 million in cash and 23 million shares of
stock. On December 17, 2012, Instagram updated its
Terms of Service, granting itself the right to sell
users' photos to third parties without notification
or compensation starting on January 16, 2013. The
criticism from privacy advocates, consumers, National
Geographic and celebrities like Kim Kardashian prompted
Instagram to issue a statement retracting the controversial
terms; regardless, the issue caused Instagram to
lose a portion of its user-base as former users
switched to other Instagram-like services.
These
services included Pheed, a multi-media social sharing
platform launched in November, that gained more
new users than any other app in the United States
the week that Instagram changed their terms of service.
Another service that gained many new users post-announcement
was Yahoo!'s Flickr which Flickr released as the
new mobile app for iOS with built-in vintage filters
to rival Instagram prior to the changes of terms
and conditions by Instagram. Instagram is currently
working on developing new language to replace the
disputed terms of use. In January 2013, it was confirmed
that Instagram has asked for photo IDs to verify
identities due to unspecified violations. Following
the appointment of Emily White to the position of
chief operating officer in March 2013, White stated
in September 2013 that the company should be ready
to begin selling advertising by September 2014 as
a way to generate business from a popular entity
that had not yet created profit for its parent company.
For users, Instagram remains committed to free and
open access to their smart-phone app. During an
interview with WWD, Ms. White said "the sophistication
of cameras on smartphones as one reason for ushering
in the transformative change" and she used an example
of, during a fashion show, seeing the large cameras
being replaced with mobile smart phones. On October
3, 2013, Instagram announced that it would be adding
advertising to its platform. On December 12, 2013,
Instagram announced Instagram Direct, a feature
allowing users to send photos to specific people
only directly from the app. The announcement has
been met with mixed reviews by users.
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