Facebook’s acquisition of Instagram brings talk of a tech bubble back to the blogosphere, but what does it mean for brands?

I think it clearly reinforces the importance of visual story sharing. (And the determination of Facebook to remain the number one photo sharing site.) Plus, it reminds us that social platforms are now built with smart phones as the starting point. While Twitter would have made a much more natural owner for Instagram — as they share an asymmetric follow structure and mobile friendly, lightweight sharing raison d’être — Facebook has won this round of Silicon Valley chess.

In the short term, our advice has not changed (posted here). Instagram is best for brands who have a visual story, brands already fluent in the major platforms, and brands with a skilled team of Community Managers who can feed in content.

Long term, Facebook will have to monitize the service to justify the whopping $1 billion price tag and as they become a public company. Your Instagram photo could potentially become an ad (“story”) in the new Facebook universe. Facebook has posted a promise to “building and growing Instagram independently”. But no one really believes that it can just stay the same. I think the Facebooking of Instagram will cost the latter platform the trendiness and hipster appeal that made it attractive to brands seeking an audience of early adopters, rather than just mass numbers. Instagram’s passionate user base is predictably upset and have been posting thousands of anti-purchase photos. Facebook probably doesn’t care, especially as new users are flocking in via the new Android app and all the publicity.