Facebook buys Instagram: a desperate attempt to stay cool

In the world of Facebook relationships, Instagram held out for just the right moment. One week ago the popular iPhone-only photo sharing app was released for Android, and a million people downloaded it in a single day. Under two years old, the company's rise was what the industry tends to call meteoric. Like the pouty-lipped Lana del Rey, it offered nostalgia for the weary masses with a bit of engineering thrown in. Taking good photos doesn't come easy, but X-Pro, Lo-Fi and the selective blur tool made exposure and depth of field things of the past.

Instagram is special because it's everything Facebook isn't. It's simple, elegant, easy to use and doesn't force you to use it in a way you don't like. And creating it was a labour of love for the staff, who at the most recent count numbered 13. I'd say love wasn't exactly a priority for Mark Zuckerberg when he made Facebook.

The reaction to the buyout was cynical. As one person commented, "The web needs a better business model than Bake a Beautiful Cake from Scratch and Then Feed It to Godzilla."

Zuckerberg promised he was committed to "building and growing Instagram independently," i.e. not swallowing it whole just yet, but other recent Facebook purchases have not been so lucky. Facebook bought location check-in service Gowalla in late 2011, and shut it down soon after. This and many of the company's other acquisitions have been 'talent' buys, bringing in smart developers to improve Facebook's user interface or touchscreen technology.

Twitter did the same with one of its recent purchases, Summify. The algorithmic tool sorted through your RSS, Facebook and Twitter feeds and showed you only the most 'relevant' stories, depending on the number of times your friends had shared those articles. Unlike the much-celebrated Flipboard, which is restricted to iPads and iPhones, you could have Summify's picks sent to your inbox. Where similar algorithmic tools were clunky and unreliable, Summify was clean and useful. Yet when Twitter bought it in January 2012, they announced Summify would be shut down.

At the moment Twitter has left its other recent purchases - Posterous in March and Tweetdeck last summer - up and running. It seems there's a fine line when you acquire a company that lets users interact with your product better than you ever could.

So why is Facebook keeping Instagram alive, rather than integrating it into the flagship product or shutting it down? Because in its current state, Instagram still has its fans in the honeymoon phase, something Facebook can now only remember with misty eyes. Instagram is easy to digest; flipping through your feed takes a minute at most.

It solves a problem for obsessive picture-takers by forcing us to edit our pictures and publish them, rather than consign them to the back rooms of iPhoto. And it's used in equal measure by hipsters, attention-seeking teenagers, and normal people, without conflict amongst the three. Facebook, on the other hand, instantly lost its cool when it opened out to preteens and then the wider world. Parents may also be on Instagram, but it's a lot harder to be dorky while taking photos - especially when filters get involved.

But is cool worth $1 billion? Google must have thought so when it bought YouTube for $1.65bn in 2006. But the commercial uses for YouTube were obvious, while Instagram purports to be a refuge from that world.

If it was all slick appeal that seduced Facebook, then the current tech bubble is worse than we thought; because for all the venture capital money flying around Silicon Valley, a large chunk of startups are just trying to be cleaner, more addictive versions of the latest trend.

Instagram would do well to ignore the noise and remember their roots as they get pulled further into the Zuckerberg fold. Because the single rule of cool is that the way to lose it is to get too popular.