No ads. No payments. No charged upgrades or premium options. So how does Instagram actually make money?
Instagram has previously considered allowing advertisements on its plattform, but it has never been a very popular idea. Users are attracted to its clean, simple interface which displays nothing but the pictures of the people they follow, the number of likes, captions and comments. URLs and links posted to Instagram don’t work, so there is no need to worry about being redirected. But while all of this spells attraction to users, it also does not contribute towards the already non-profitable company.
This is probably the reason why in late 2012, Instagram changed its terms and conditions to allow the sale of users’ personal content to third parties without any notification or compensation for their users. The change whipped up a storm among users and many users quitted the app over what they saw as a violation of their rights.
When Facebook bought over Instagram in March 2013, it decided decided to make it slightly more profitable to its parent company by charging advertising fees to businesses who recorded videos on Instagram and later shared it on their Facebook pages. Some form of money milking was naturally to be expected after the social media giant paid nearly a billion dollars for ownership of the photo sharing app.
Rumours of incorporating ads on Instagram have abounded for years. The app boasts an enviable and growing user count that advertisers would undoubtedly be willing to pay high prices to reach out to. But can ads be put up on such a way on Instagram so as to not deter its users? We have yet to tell.
[Source: How Facebook is Already Profiting from Instagram: http://adage.com/article/digitalnext/facebook-profiting-instagram/243515/]
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