Instagram needs to make money

It's no secret that Instagram has been moving closer to seriously exploring the ways to generate revenue.  Ever since Instagram has been acquired by Facebook just on its way to going IPO, Instagram went from a 2-year-old company without any revenue stream to publicly traded company over a weekend.  Undoubtedly Instagram must be getting lot of pressure within Facebook to justify its $1 billion price tag by creating potential return on investment.

So it is understandable to see Kevin Systrom putting out a very aggressive Terms of Use (TOU) revision to users.  The language in the TOU suggested that Instagram can not only feature ads that are not marked as ads, but also can sell the right to use user's photos to third party sites.  Now Instagram user community has protested to the new terms, Systrom wrote a blog post backing down on selling the user's photos.  But it still retained a right to feature ads without clearly marking them as ads.

A photo of Instagram's TOU with Instagram's Earlybird filter.
I don't think I have to worry about my privacy on that one.
Source: http://instagram.com/p/TaCdC9Pekm/

Here is a fact.  Instagram needs to figure out make money, and do it fast.

Facebook += Instagram: has era of consolidation begun?

Facebook made an announcement today that they are acquiring Instagram for $1 billion.  Blogosphere and tech news sites are buzzing with reactions to this announcement.  Aside from being awestruck by Instagram's meteoric rise to 30 million users with team of 13 over 2 years, there are a few common questions that everyone seems to be asking.  I thought I might add my own question to this mix.

Congrats to the Instagram team!
Will this be the end of Flickr integration?

Will Facebook start buying social network sites with all the cash that it's getting from pending IPO?  In other words, has the era of social network consolidation officially begun?

Although Facebook may not want to admit it, we may be seeing the start of selective consolidation.

Facebook has acquired Instragram for specific reason.  They wanted to get rid of growing competitor and complement their relatively weak mobile photo sharing experience.

Everyone knows that mobile will be even more important platform in future.  Studies project that by 2016 there will be more number of mobile devices than entire world population.  Given this explosive growth of mobile and most of social networking users are increasing using mobile to share data, Facebook had to face Instagram's challenge.