Why Facebook Is Paying $1 Billion For Instagram

Instagram’s traffic has steadily risen over the last six months, reaching 3.8 million last week, up from 68,800 visits for the week ending October 22, 2012. That kind of momentum explains why Facebook paid $1 billion for the photo sharing network with over 30 million users.

While the majority of activity takes place within the Instagram application, the website provides links to the Apple App Store and Google Play as well as some account management tools.

The audience for Instagram is relatively young: over half of the visitors to the Instagram website are under the age of 35. This is an interesting contrast to the visitors of Facebook’s website, which reflects a more mainstream audience with a higher share of older users. These differences can certainly offer opportunities to promote and grow usage of each of the networks across age groups.




Many users of Instagram share their photos across a number of social networks since within the Instagram application, you can link to your share photos with Twitter, Facebook, Flickr, Tumblr, Posterous (recently acquired by Twitter) and Foursquare accounts.

As a result of this integration and heavy use of social networks in general, social networks refer the majority of traffic to the Instagram website. Last week, new visitors represented one in four of the traffic going to the photo sharing site from social networks, most likely because they saw photos within the feeds of their friends.

Last week, there was considerable excitement around the launch of Instagram app for Android phones, which became available on Google’s recently relaunched digital media store, Google Play.

The app reached over one million downloads on the first day of availability. Visits to the Instagram website increased 59 percent over the previous week and Google Play ranked sixth among the downstream websites visited immediately after the Instagram website.

Please note this data does not include mobile traffic. Readers, do you use Instagram yet?

Guest writer Heather Dougherty is director of research at Experian Hitwise.
Purchase of Instagram
Animation created by Online MBA Programs.

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