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Facebook Learns that You CAN Buy Love (It Costs $1 Billion): Page 2

Facebook's acquisition of Instagram reveals how tech companies are wooing users.
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I don’t know when it happened, but at some point in the last ten years, non-technical users became more important than technical ones.

The business models of technology companies used to be all about selling technology products. The most profitable products were the high-end ones, which would only be purchased by technical enthusiasts.

But now consumer technology is dominated by the non-technical users, and business models are dominated by advertising, especially in the case of Google and Facebook, and also general content.

Other major technology companies, like Apple, Amazon and many others target mostly general, mass audiences.

The broader public is ambivalent about innovation, functionality, features and so on, and simply respond to how products make them feel about themselves. A social app or a gadget is “purchased” and used just like clothing or jewelry or brand of beer -- as an expression of personal identity.

If you feel contempt for this idea, then you’re probably a technical user.

In any event, there are many reasons why big companies buy small ones. They want to buy talented employees with special skills. They want patents. They want new markets.

The Facebook acquisition of Instagram represents a new era of big-dollar acquisitions in which big companies buy small companies with products that are loved by users.

They are literally buying love.

Of course, this changes everything for Silicon Valley startups. Forget about the business plan. Forget about monetization. Just make something that lots of people fall in love with.

Paul McCartney was wrong. The thing about love is that it’s very hard to create if you’re a big company. Tech giants can invent new technology, engineer their way to awesome features and design in a way that impresses people.

But love? That’s not easy to create, invent, engineer or design for.

But you can always buy it.


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Tags: Facebook, social media, acquisition, Instagram


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