Twitter-Instagram photo war reveals new business realities of social networks

The photo-sharing turf war is escalating, with Twitter copying Instagram-like features and Instagram (owned by Facebook) no longer making its photos viewable within tweets.

No matter which company wins, users will lose.

It seems time to just accept that Facebook and Twitter’s forget-about-money-and-put-users-first startup phase is over. Both companies are pivoting hard toward monetization and market-share protection as their primary goals.

Promoted tweets and sponsored stories are filling up timelines and news feeds. Facebook Page owners are relentlessly pestered to fork over cash for better visibility of their posts. And third-party developers are increasingly being disempowered.

The networks have shifted focus from creating value to capturing value. And to capture value, they each feel the need to lock users into their own platforms and reduce integration, thus limiting competition.

A quick history of the photo-sharing wars

In 2011, Twitter launched its own photo hosting and sharing service, rather than rely on third parties like Yfrog or Twitpic.

After trying and failing to dominate the market with its own Facebook Camera mobile app, Facebook was willing to pay $1 billion – over $28 per user at the time —  to acquire Instagram this year.

In July, Twitter stopped letting Instagram users sync their Twitter friends list with the service.

Twitter now plans, perhaps by the end of the year, to launch photo filters that would mimic Instagram’s popular feature. And Instagram just decided to stop letting Twitter show its photos embedded inside tweets. Tweets can still link to an Instagram picture, but the user will have to open the link in a Web browser to view it.

Writing at GigaOM, Mathew Ingram surmises that Twitter is motivated by “ambitions as a media entity,” which means it “is trying hard to monetize or at least to exert some control over content that is being created by other companies, whether it’s Instagram or The New York Times.”

Implications for journalism

Ingram concludes with questions for news organizations and other media:

I think moves like Instagram has made should get more media companies thinking hard about the relationship they have with Twitter. It is not just a conduit for your content to reach your users whenever and wherever you wish (if it ever was) — it is a proprietary network built by a company with monetization and expansion on its mind, and your content is part of that equation. What are you getting out of it and why? And will that change in the future as Twitter’s mission and vision evolve? And what will you do if it does?

That’s probably correct. However, it is also unavoidable. Twitter, Facebook and Instagram are dominant players in social media, and you have to play with them if you want to be in the game.

This bargain reminds me of a scene from “The Godfather,” in which Don Corleone declines to join Virgil Sollozzo in his heroin business:

I want to congratulate you on your new business and I’m sure you’ll do very well and good luck to you. Especially since your interests don’t conflict with mine.

Social networks are great partners for news and media, and even for other social networks, as long as your interests don’t conflict with theirs.

We have made it easy to comment on posts, however we require civility and encourage full names to that end (first initial, last name is OK). Please read our guidelines here before commenting.

  • http://www.facebook.com/profile.php?id=100000929193078 Dan Farfan

    Terrific post, Jeff. Insightful.

    “The networks have shifted focus from creating value to capturing value.”

    Love this. Well put.

    Also, from capturing users to capturing value.

    “…and you have to play with them if you want to be in the game.”

    I’m not so certain this is necessarily true. A player such as News Corp has the cash and audience size to do “The Daily,” they simply ignored (forgot?) the immutable fact that a seminal idea is needed to drive a breakthrough unique value proposition. That doesn’t mean the breakthrough wasn’t “out there” to be had. It just means it didn’t make it into the News Corp office (or, heaven forbid, out of their office). “The Daily” could’ve (easily, imo) crushed twitter as the place to discover and discuss the news of the day, but they didn’t try to do that.

    There is one word missing in this discussion… monopoly. It is unavoidable that as Zuck and @Jack endeavour to be digital robber barons of our time they will bump up against the same lessons that the Carnegies, Mellons, Rockefellers and Morgans did, both good and bad.

    I predict future historians will use Zuck, @Jack, Gates, Ellison (and a few others) to contrast them and this era with the monopolists and the 19th century. Someone may coin a nifty term to label the would-be monopolists, but it won’t be kind or represent success. At best the term for today’s titans will represent a stepping stone to something much more valuable that these folks could’ve done, but didn’t.

    I believe the 21st century will be shaped (online at least) by the people who embrace the new economic, uniquely digital, truth that for “the company” to “win,” every player in the ecosystem must win, or at least have opportunity to win. This means balancing incentives to reward all members of the system for productive actions and reactions, not just the source/owner of the ecosystem itself. “We profit, you pay” can’t win because it’s fundamentally inferior to “We all profit.” ( as counter-intuitive as that may seem today to us living in a capitalism 1.0 world )

    Zuck and @Jack will never get there, because for them, “them,” (aka high priests and priestesses of the software/system) and “us,” users (aka, lowly unwashed masses, the hunted) and “marks” (aka companies with “brands” hunting the unwashed) will always be an unnatural distinction that soils their every thought before it leaves their head on the way to paper. It would be unfair to blame these guys alone, however. As far as I’ve seen there is not a single person in all of Silicon Valley or on Wall Street ready to have any other conversation, much less put money into a company with a narrative that doesn’t start (and stumble) there. And lets not underestimate the importance the role the “monied” play in this dance.

    I predict history will have a less than kind label for them also.

    @DanFarfan