1. Facebook is a for profit company.

2. Facebook probably wants to seek a direct monetary ROI on Instagram.

3. Facebook may or may not have figured out that strategy. Either way, not revealing those details is an indication of nothing beyond standard business practice.

4. Some users don't like ads, which is evident by the popularity of ad blocking tools.

5. Some users don't mind ads, some even click on them, which is evident by the revenue ads generate.

What part of this article brings anything new to the table that we haven't known for months/years?

The exact same thing that your comment brings. It's not saying those are interesting things, it's saying "why do all these 'new sources' think those are interesting ideas"

> 5. Some users don't mind ads, some even click on them, which is evident by the revenue ads generate.

Don't underestimate people clicking ads for the wrong reasons (e.g. they don't realize it's an ad, the ad makes misleading or incorrect claims, the user is just using the ad as a convenient shortcut to a website when searching for it on Google, etc.)

I'd guesstimate this to be the majority of ad clicks and revenue.

Sorry but this guesstimate is a bit absurd. If the majority of ad clicks were ineffective or for wrong reasons, Google's $231 billion market cap would be tough to justify.

These are not mutually exclusive concepts, just FYI.

you're suggesting the majority of google's ad revenue is misclicks?

6. Some users have developed som kind of "Ad Blindness". I can't remember having seen an Ad in years. Maybe the unconscious mind sees them though (?) That being said, I'm all for advertisements. Content providers have the right to get a ROI for the time they spent producing the content - naturally.

Kind of a condescending article. Really, Instagram pulled an enormous bait-and-switch. Create a great application, give it away for free until you've built up a huge base of users, then sell the application and its user base to another company and let them figure out how to actually make money off it.

Understandably users are going to be upset because they're being asked to either pay for or see ads with something that they used to get for free and ad-free. People will always be upset when you take something away, even if you gave it to them for free.

How's it a bait and switch? Should free things be provided to you forever? If something is being given to you for free, shouldn't you realize that at some point money has to enter the equation?

“If you are not paying for it, you’re not the customer; you’re the product being sold.”

Everyone trots out that line in a cargo-cultish manner. Thing is, you're still 'the product being sold' once you become a paying customer.

Not for startups! They're special.

I think it's more about how they sold the company while the application was still not making any money. People expected to have to pay one day, of course, but by selling the users without the business model, Instagram showed it didn't care about the users.

Letting another company figure out how to make money with your product does sound odd, particularly when the product is the users and not some kind of resource.

Oh I am very much aware of this fact.

But another fact is that if you give someone something for free for a while and then you start to charge for it (or add ads to it) they are going to be upset, regardless of whether they "should" be upset. No one is happy about the experience of having value subtracted.

But this is still not bait and switch.

You can use of the myriad if other apps, like Flickr which stores the images at a decent resolution (instead if the 612x612)

If you start free, stay free. If you start with $$$, then try to go $$. That's just the way it will always work.

They are staying free, they're just adding ads. It's no different than Facebook. Facebook has been and always will be a free site.

Does Instagram have the critical mass that Facebook has? Personal anecdote: I have stopped sharing photos on instagram since Facebook made it easier to share photos (especially in bunch) on mobile.

Users don't really have any right to be upset over not being able to use services completely for free. Is this what the world has come to? Start-ups make their service free initially until they've gotten enough users, then try to monetize and then the users hop on to the next free service. And repeat. Either user expectations have to change, or start-ups will have to realize that they need to start monetize right away.

Since seed investments continue at a breakneck pace, and since instagram sold at many multiples of any revenue stream their existing service could have provided, I don't see much chance of startups realizing they have to change.

Likewise, user complaints are a tempest in a teapot. Does it matter to anyone how angry you are about the downward spiral of your favorite service? I actually think people enjoy their righteous indignation and are nowhere near being mad enough to consider not using the next cool free service.

Startups don't have to realize that they need to start monetizing right away.

Companies that buy startups need to realize that if they buy a startup that has only free users who aren't looking at ads, they might not be buying what they think they're buying. Because those millions of users have all been trained to expect to enjoy the service for free. So when you buy a company for its user base, you need to consider that free users are not worth what paying/ad-viewing users are worth, and if you try to charge or show them ads without creating more value for them in return, many of them might leave.

If companies that buy startups realize this, then the startups themselves will start monetizing right away, because it will be the only way to get acquired.

I think Facebook knew exactly what they were buying: a hedge against disruption by the strongest startup in the fastest growing area of relevance to Facebook, mobile photos.

I also don't think Facebook gives a shit about a lot of hand-wringing hipsters. They've been creating bad press with their decisions for years, I hardly think this little impotent uprising will ruffle their feathers.

Yes, it's also a strong possibility that Facebook didn't buy Instagram for its users, but bought Instagram simply because they didn't want to compete against Instagram.

I'll repeat. "If you start free, stay free. If you start with $$$, then try to go to $$. That's just the way it will always work." Try not to get too philosophical about it. User expectations are set and managed by the service providers. If the user has a certain expectation, it is the provider's fault (in this case Instagram).

Exactly, it's all about managing expectations. You can't blame users in the aggregate for being upset when you set their expectations very high and then try to bring them down.

Actually, to blame an aggregate group of people (especially your own customers) for anything is folly. Chances are it's not them, it's you.

I suspect if you asked a lot of users what they thought about Instagram's income, they wouldn't have a clue what you're talking about. I'm not sure that a lot of people even realise why they pay for mobile applications (they paid for the phone so why are they paying more now?), and just attribute it to corporate greed.

I asked the question of some of my peers recently, and their justification was that Instagram didn't new income, as it was providing fun. I'll leave you to figure out how that works.

This isn't so much bait-and-switch as it is a car dealership forgetting to put a price tag on a car and people getting mad that it isn't free to buy.

They didn't exactly forget, though: they actually went out of their way to paint a huge sign reading something like, "GREAT NEW CAR ... GET IT TODAY ... TOTALLY FREE ... COMPATIBLE WITH ALL GARAGES!" Of course, they didn't promise the car wouldn't play ad jingles through the stereo system, either.

I like how they used twitter to complain about a social media application having ads.

This proves just how far you can trust the stated intentions of free users.

Either: Facebook have no imagination. Or: Slate (and the internet) has the wrong end of the stick.

Scenario the first.

So FB dropped a cool billion on a photo-sharing social network and app with a sizeable, vehemently dedicated and pretty damn vocal userbase. Now they want to make money out of it. Fine.

"So guys, Instagram monetization. Hit me." "Um." "Um." "Ads?" "Perfect!"

I (and I'm sure a large majority of Instagram users) am pretty much instantly put off by ads. Especially in-app or in-feed apps. Any ad space sold on my screen is pretty much money wasted.

Scenario the second.

There have to be other ways to make money from Instagram that make one iota of sense given the community and demographic. Premium filters maybe? I'm just sayin'.

No, it's that Business Insider writes trolly headlines. Nowhere in the interview did Facebook say nor "confirm" they were adding ads to Instagram.

Ugh, you're right. The actual quote:

    BI: Will you put ads in Instagram?
    CE: Eventually we'll figure out a way to monetize Instagram.

So they're a basically just leaving the option on the table...

This is modern media 101.

BI are masters of click-bait. Which makes them masters of spreading untrue statements.

> No, it's that Business Insider writes trolly headlines.

BI was the child of Henry Blodget, barred from the securities industry for the famous POS memo. That should tell you everything you need to know.

>> I (and I'm sure a large majority of Instagram users) am pretty much instantly put off by ads. Especially in-app or in-feed apps. Any ad space sold on my screen is pretty much money wasted.

Why don't you like them? Aren't they better than spammy banners? Or even worse-- the interstitials where you have to watch ad for few seconds compulsorily!

All the promoted content in feeds (like promoted tweets) has clearly marked as an ad and they provide consistent UX with rest of application. So I'm curious to know what's the gripe?

Of course banners are better, it's easier to block them by software or by mind.

Did you read the article? The entire thing is about how Instagram has NOT said they're adding ads, and likely, based on the VP's response, actively trying to stay away from them.

They don't really need 'ads', just corporate accounts, right?

When someone creates an account they could immediately be following a Coca Cola, BMW and Apple instagram account.

They could even make it a requirement to follow a small number of brands.

I for one wouldn't be too pissed if an occasional cool picture of an apple store or BMW came up in my feed...

Headline in a year: "Instagram Owners Appalled To Learn That Users Don't Like Ads"

The fact of the matter is that, as long as the VC treadmill keeps moving, there will be start-ups earlier in the cycle willing to take the place of start-ups like Instagram and Facebook (which are trying to find a way towards profitability).

I expected to see (theonion.com) at the end of this title after reading it.

They should partner with http://printstagr.am/ and make money off their users.

^ this. or something like this. It always bugs me that the only way anyone has figured out how to monetize anything online is by throwing up some ads on it. Its ugly, intrusive, and the users end up pretty much tuning them out anyway. Surely there has to be a better way to make money.

-prints, photobooks, physical stuff like that. people into making their photos look vintagey would surely love to place their fake polaroid next to their record collection.

-All instagram images are geotagged and timestamped. How about you partner with media outlets and allow them to leverage all the images being taken for specific events? "instagram @ SXSW" or whatever.

-"license this image" - Lets say I run a food blog. clearly a great place to look for imagery of food is on instagram. I could affordably license the image and give money to the photographer (and instagram gets a cut.)

-etc, etc, etc,

These are just off the top of my head. I'm not saying these are brilliant ideas, or that they would necessarily work at all. What I am saying is that I wish that we'd explore solutions outside of "lets plaster ads all over it." It's an ineffective way of making money that's just stolen from the slowly-dying magazine industry, and is that really the industry you want to emulate?

I've used printstagr.am, and liked it. The prints are fun just like the instagram photos. It would be cool if this were built in to Instagram, and I could mail the prints as a gift.

Yup that's what I was thinking. Build in the functionality to order prints straight from the app. They could expand to postcards which I think would be awesome.

Expand it out even more. If you make a postcard or printout of my photo, give me a cut of the money (even if it's a small one). Let me use that credit towards my own postcards, or if I get a ton of it, cash it out.

It would also encourage brands to put good content up, rather than just being a boring corporate mouthpiece, which is always a plus.

That's cool. I like PostalPix, which is similar. I agree that Instagram could definitely do something like this to make money instead of ads. The ability to produce worthwhile physical products from your service is an advantage over something like Twitter or Facebook.

Articles that cherry pick comments from Twitter and then announce it as some sweeping generalization need to stop. The evidence for the headline is based on 4 screenshots of some random tweets.

It happened recently with the MS vs Android malware 'backlash' and also when Instagram was released for Android.

Just because you can cherry pick tweets from the vocal minority to form your attention grabbing headline doesn't mean it applies to the entire user base.

The title of this should be "Facebook is looking at ways to monetize its billion dollar investments, much like every other public company in world."

I'm not sure how this is even worthy of an article.

They've never confirmed they're doing ads.

But I would think something similar to in game items would work great. Aviary for instance has a great set of standard filters, and some "extras" you can buy. I have already purchased one.

Would I have clicked on an ad anytime in the next year? probably not

Hopefully they have a simple ad-free version of the app costing anywhere between $1.00-$5.00, for those of us that don't mind paying for an ad free experience.

lol @ "may"