Facebook (FB) Introduces Instagram Video
Social media giant Facebook (FB) recently announced that it was adding video capabilities to its photo-sharing app, Instagram. Although the initial announcement seemed mundane, the arrival of Instagram video tilts the tables significantly in Facebook's favor in its long-running tug-of-war contest with microblogging site Twitter. It also opens up exciting opportunities in mobile advertising for Facebook, which is the current leader in social e-commerce revenue, with a 36% market share.
Twitter comes in second, at 20%, followed by Pinterest at 15% and Google (GOOG
) at 6%. How can adding video to Instagram change the social e-commerce game? Let's take a look at the key facts. Daily Chart
Facebook's $1 billion acquisition of Instagram last April has long been ridiculed by Wall Street as a pointless impulse buy that had no real growth value, despite the app's 130 million users. Instagram is best known for its filters, which can give smartphone photos a warm, retro quality reminiscent of Polaroid and Instamatic images. For its newly added video function, Instagram is introducing 13 new filters. These videos are limited to 15 seconds each and can be shared in the same way as regular photos. This new feature doesn't seem particularly important until it is compared to Vine, which Twitter acquired last year $30 million. Vine offers a similar service, in which users record videos limited to six seconds, which can also be posted across various social networks and websites. This new craze in "bite-sized" videos has taken off this year. Vine's mobile app doubled its iOS market share in the United States between January and April, reaching 8% of iOS users with 13 million downloads. Visits to its domain, vine.co, surged from 77,000 unique monthly visitors in January to 3.6 million in May, indicating a huge surge in interest in this new micro-video format. At 13 million active users, Vine is still a tenth the size of Instagram, but its rising popularity has apparently caught Facebook's eye. For Facebook, adding 15-second videos to Instagram could give companies a whole new medium to deliver ads. Several companies, including Burberry, have already released Instagram videos to test out the new format. When Instagram and Facebook's News Feed ads are used in tandem, advertisers could find new ways to draw from both sites to boost sales. For example, companies can use paid News Feed advertisements to spread their Instagram videos, which can then be spread virally to reach an even larger user base. Vine, by comparison, does not offer paid advertising yet. However, that could change if Twitter goes public later this year, as some analysts have speculated. It's obvious that Facebook sees Twitter as a threat. The company recently added hashtags, which have long been part of Twitter's culture, to its News Feed, in order to catch up on the public's obsession with trending topics. Hashtags can also be added to television broadcasts and live events for immediate updates. Adding Vine or Instagram videos will now become an integral part of that culture. It will be interesting to see how this new battle shapes the future of social e-commerce. Other News About FB Facebook Takes On Twitter With Video
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Published on Jun 24, 2013
By Leo Sun