I don't think users feel that way. What they want is to be acknowledged and respected for helping build the server to what it is today. No users = no service. Don't sell us out just because you chose to take money and sell for a cool bil.
The users didn't help build anything. Instagram built a cool service, and the users used it. They didn't build anything.
Now obviously network effects help something like this grow, but don't kid yourself. They aren't running a charity. They are running a business. At some point you have to start making money or the service just goes away. Then all that those amazing users "built" will be gone in a second when they flick the power switch.
They aren't running a charity, you're right about that. But I think they misrepresented their business by giving it away for free, knowing full-well that it won't be sustainable in the long run under that model. Their response? "Oh ok, no problem, we'll just switch the terms of use while nobody is looking."
You could characterize it that way, or you could assume that all of your users aren't complete fools and realize at some point they will have to make money to pay for the costs of running the service. They also know full-well that it isn't sustainable to run this service for free forever.
They know and they don't care. It's not a customer's prerogative to worry about how a company makes money. As much as people like Instagram, if it disappeared or went under, people would move on and forget about it. I would say that the onus is on the company to find a way to monetize that does not insult, mislead, or deride their users.
How does adding ads "insult, mislead, or deride their users"? This whole discussion is silly. 99% of the users will keep happily using the service with ads. They were smart enough to know they were coming eventually. A 1% very vocal minority will piss and moan on internet message boards about how pissed they are and how absurd it is that this coming isn't continuing to give away a nice service.
Everyone bitched when Facebook added ads, but guess what, they keep growing and people keep using it. Shocking.
There is no lie. They offer the service for free. Nobody said they would never ever add ads. That's just being silly. What possible reason could people have for being angry with someone adding ads to this thing they are giving away for free.
Just because a company offers a service for free does not give it the (moral) right to try to sneak in changes to what you signed up for as a customer. Unfortunately, legally they can pretty much do whatever they want as long as they include enough fine print that nobody ever reads in the ToS. I think you are arguing from a legal perspective, which you're absolutely right about; I'm talking about "the right way to treat your customers" perspective.
If I as a customer pay any amount (including $0.00) and agree to the terms of service, the company should honor those terms, or, at the very least, be forthcoming with how they will handle my data.
The reason people are angry is because:
a) They didn't have any inclination of how Instagram will try to monetize. I think you are giving users way too much credit in how these startups work (ask your non-tech-savvy friends how Facebook or Google make money; I guarantee you will get blank stares). The customers who joined before Facebook took over signed a completely different set of ToS. Again, there is nothing obliging them legally to grandfather these customers, but it's not a nice thing to do "Thanks for the ToS. Btw, Facebook took over, so good luck!"
b) They tried to sneak in the changes and got caught. Nobody likes to have stuff done behind their back, so a big announcement with enough lead time to switch services would be nice. I don't use Instagram anyway, but I think this applies in general in how to treat your customers.
That seems unlikely. They're still using Facebook. A few thousand people are paying App.net $50 a year and a billion people are using Facebook. I suspect people would rather have a few ads in their Instagram feed than start paying Flickr. Just a very vocal minority pissing and moaning because they can.
Really? Only 5 days ago this was on the front page of HN: http://news.ycombinator.com/item?id=4917689. And what about the complaints of Twitter and Facebook ads? You can't say that people don't whine about companies monetizing via advertising.
