When Brands Collide: Facebook Buys Instagram

Earlier this week it was announced that Facebook had acquired funky photo-sharing app Instagram for a cool $1 billion in cash and stock. However, many in the digerati expressed fears about this acquisition, wondering if the giant in Menlo Park would eventually devour the fun little app. Mashable even shared an article on how to safely extract your photos from the network before deleting your account. 

This fear is not without merit. I have to admit, as a devout Instagram user, I am personally concerned as I love the platform and use it very differently than I use Facebook. Professionally I am intrigued to see where this goes as I think Instagram holds enormous potential for businesses. Several brands are already using Instagram quite effectively to connect with customers.

When brands collide it can go a variety of ways. While both brands issued statements from leadership gushing about the other as they held hands and walked off into the sunset, I can’t help but give a few brand collision cautions to the newlyweds.

More Like Google

Speaking of digital giants, Google is actually someone for Facebook to look to. In acquiring YouTube a few years back they could have easily folded the network into their own Google Videos platform. What did they do? Just the opposite. Last year they finally retired their platform and have now fully integrated YouTube as the only non-Google brand in their newly designed, omni-present navigation bar. Google understood the power of the YouTube brand and the considerable equity it had with its network of users.

The result? YouTube is now the second largest search engine in the world after Google itself. The overall business and market share was strengthened by keeping these brands separate.

Less Like Twitter

Twitter, on the other hand, could give Facebook a cautionary tale (a cautionary fail whale of a tale?) on what not to do. While they showed great wisdom in seamlessly acquiring Tweetie, they’ve very clumsily gobbled up TweetDeck. Though Tweetie was a great app, it was a brand built on translating another brand’s experience (Twitter) to mobile.

TweetDeck on the other hand, created a unique experience — slicing and dicing one’s stream — out of Twitter. This unique bit of brand DNA has recently been steamrolled in newer releases of the TweetDeck app. Even their black/yellow bird icon is now Twitter blue.

Careful When Petting the Rabbits, Lenny

Many are simply afraid that Facebook will put on a bib, lick its chops, and devour the app whole, offering Instagram a fate not unlike that of their most recent acquisition, Gowalla, which ended up with a pillow over its face, Chief Bromden style. This worry stems not only from history but from the fact that Facebook has a bit of a trust problem in their brand DNA. From the Gowalla brand debacle to continuing struggles with user privacy, Facebook does little to allay concerns that resistance is futile.

The acquisition of Instragram really provides Facebook with an opportunity to amend this unstable “trust” molecule in their brand DNA. While Facebook engenders Big Brother comparisons through privacy concerns, Instagram is a brand community based on fun and visual storytelling. It’s not the be-all-end-all behemoth of a social network. It does one thing simply and beautifully. This needs to be nurtured.

Who’s the Winning Brand?

In the end, Facebook’s more subtle acquisition beyond simply a hot app with a thriving community is a strong brand. It may sound like squishy ROI but when you are a monster brand with trust issues, sometimes the best way to improve your mojo is to borrow some from a brand with a brighter story. That’s why absorbing Instagram into their overall brand (a la Twitter + TweetDeck) is a mistake. A better model is growing both brands — Facebook and Instagram — separately (like Google + YouTube) and making the whole brand DNA even stronger.

What’s Next?

Your guess is as good as mine. However, Instagram is more than technology and, given the price tag, I’m pretty sure Facebook knows that. What remains to be seen is whether they can embrace something quirky with a loving community or if they’ll kill their new golden goose.

What do you think is next for Instagram?