Instagram began development in San Francisco, United States, when Systrom and Brazilian Krieger chose to focus their multi-featured HTML5 check-in project, Burbn, on mobile photography. The name “Instagram” is a portmanteau of “instant camera” and “telegram.”
On March 5, 2010, Systrom closed a US$500,000 seed funding round with Baseline Ventures and Andreessen Horowitz while working on Burbn. Josh Riedel then joined the company as Community Manager. Shayne Sweeney joined in November 2010 as an engineer and Jessica Zollman was hired as a Community Evangelist in August 2011.
In January 2011, Instagram added hashtags to help users discover both photographs and each other. Instagram encourages users to make tags both specific and relevant, rather than tagging generic words like “photo,” to make photographs stand out and to attract like-minded Instagram users. In September, version 2.0 went live in the App Store (iOS) and included new and live filters, instant tilt–shift, high resolution photographs, optional borders, one click rotation, and an updated icon. On February 2, 2011, an announcement revealed that Instagram had raised US$7 million in Series A funding from a variety of investors, including Benchmark Capital, Jack Dorsey, Chris Sacca (through Capital fund), and Adam D’Angelo. The deal valued Instagram at around $25 million.
On April 3, 2012, Instagram was released for Android phones running the 2.2 Froyo version of the OS, and it was downloaded more than one million times in less than one day. That same week, Instagram raised US$50 million from venture capitalists for a share of the company; the process valued Instagram at US$500 million. Over the next three months, Instagram was rated more than one million times on Google Play and was the fifth app to ever reach one million ratings on Google Play—as of April 2013, it had been rated nearly four million times.
As part of its second largest acquisition deal to date, Facebook made an offer to purchase Instagram, along with its 13 employees, for approximately US$1 billion in cash and stock in April 2012, with a plan to keep the company independently managed. Britain’s Office of Fair Trading approved the deal on August 14, 2012, and on August 22, 2012, the Federal Trade Commission in the U.S. closed its investigation, allowing the deal to proceed. On September 6, 2012, the deal between Instagram and Facebook was officially closed.
On April 12, 2012, Facebook acquired Instagram for approximately US$1 billion in cash and stock. The deal, which was made just prior to Facebook’s scheduled IPO, cost about a quarter of Facebook’s cash-on-hand, according to figures documented at the end of 2011. The deal was for a company characterized as having “lots of buzz but no business model,” and the price was contrasted with the US$35 million Yahoo! paid for Flickr in 2005, a website that has since become among the 50 most popular in the world.
Mark Zuckerberg noted that Facebook was “committed to building and growing Instagram independently”, in contrast to its past practice. According to multiple reports, the deal netted Systrom US$400 million based on his ownership stake in the business. The exact purchase price was US$300 million in cash and 23 million shares of stock.
In January 2013, it was confirmed that Instagram has asked for photo identification as a form of verification due to unspecified violations.
Following the appointment of Emily White to the position of chief operating officer in March 2013, White stated in September 2013 that the company should be ready to begin selling advertising by September 2014 as a way to generate business from a popular entity that had not yet created profit for its parent company. In September 2013, Instagram reaffirmed its commitment to free and open access to its smart-phone app for users. During an interview with Women’s Wear Daily (WWD), White cited “the sophistication of cameras on smartphones as one reason for ushering in the transformative change,” and she used her observation of the replacement of large cameras with mobile smartphones during a fashion show as an example. On October 3, 2013, Instagram announced that it would be adding advertising to its platform.
On October 22, 2013, during the Nokia World event, held at Abu Dhabi, United Arab Emirates (UAE), Systrom confirmed the impending release of the official Instagram app for the Windows Phone. On November 21, 2013, the official Instagram Beta for Windows Phone was released to Windows Phone 8 to allow Windows Phone users faster access to Instagram services; although, at the time of release, the app was still under development.
Instagram introduced sponsored post advertising targeting US users in November 2013, and UK users in September 2014.
On December 12, 2013, Instagram added Direct, a feature that allows users to send photos to specific people directly from the app. Instagram’s primary intention with the Direct feature is to compete against messaging services, including Snapchat.
On March 11, 2014, Instagram released an updated Android app with performance improvements and a flatter interface. The update was primarily intended to reduce the app’s file size and resource usage, and it was optimized for and tested on low-end smartphones sold in emerging markets, such as the Samsung Galaxy Y, which was popular in Brazil at the time.
The company’s Global Head of Business and Brand Development—a new position for Instagram—was announced in mid-August 2014. Facebook’s former Regional Director James Quarles was assigned the role, which manages Instagram’s revenue strategy, in addition to both the marketing and sales teams. Quarles will report directly to Systrom during a tenure in which he will develop new “monetization products,” as explained by a company representative to the media.
Since the app’s launch it had used the Foursquare API to provide named location tagging. In early 2014, after being purchased by Facebook, the company was switched to using Facebook Places.
By December 2010, Instagram had 1 million registered users. In June 2011 Instagram announced it had 5 million users and it passed 10 million in September of the same year. In April 2012, it was announced that over 30 million accounts were set up on Instagram. In December 2014, Instagram co-founder Kevin Systrom announced that Instagram has 300 million users accessing the site per month.
Instagram announced that 100 million photographs had been uploaded to its service as of July 2011. This total reached 150 million in August 2011. By May 2012 58 photographs were being uploaded and a new user was being gained each second. The total number of photographs uploaded had exceeded one billion.
There are also proprietary rights in content on Instagram. Instagram does not claim any ownership rights in the text, files, images, photographs, video, sounds, musical works, works of authorship, applications, or any other materials (collectively, content) that users post on or through the Instagram Services.
On August 9, 2012, English musician Ellie Goulding came out with a new music video for her song “Anything Could Happen.” The video only contained fan submitted Instagram photographs that used various Instagram filters to represent words or lyrics from the song and over 1200 different photographs were submitted.
On February 27, 2013, Instagram announced 100 million active users, only two-and-a-half years after the launch of the app. As of September 9, 2013, the company has announced a total of more than 150 million monthly active users.
Many celebrities have profiles on Instagram, sharing photos and videos of their personal and professional lives with fans. Some celebrities deleted their accounts in response to Instagram’s proposed change to its Terms of Service, which would have allowed the photo-sharing app to sell images to advertisers without compensation to users.
Instagram was listed among Time ’s 50 Best Android Applications for 2013.
Instagram’s users are divided equally with 50% iPhone owners and 50% Android owners. While instagram displays a neutral gender bias format, 68% of Instagram users are female while 32% are male. Instagram’s geographical use is shown to favor urban areas as 17% of US adults who live in urban areas use instagram while only 11% of adults in suburban and rural areas. While Instagram may appear to be one of the most widely used sites for photo sharing, only 7% of daily photo uploads, among the top four photo-sharing platforms, come from Instagram. Instagram has been proven to attract the younger generation with 90% of the 150 million users under the age of 35. From June 2012 to June 2013, Instagram approximately doubled their number of users. 15% of users who make less than $30,000 per year use Instagram while only 12% of users who make more than $50,000 per year use Instagram. With respect to the education demographic, respondents with some college education proved to be the most active on Instagram with 23%. Following behind, college graduates consist of 18% and users with a high school diploma or less make up 15%. Among these Instagram users, 24% say they use the app several times a day.
Weekend Hashtag Project
The “Weekend Hashtag Project” is a series featuring designated themes and hashtags chosen by Instagram’s Community Team. Followers receive the weekend’s project every Friday, and each project encourages participants to post creative photographs according to the designated theme each weekend.
Throwback Thursday is a widely used trend on Instagram where users post pictures from the past with the hashtag #TBT. This trend usually includes pictures of users’ early childhood, past special occasions, or monumental events. This popular trend started in 2011 shortly after Instagram introduced the capabilities of hashtags on pictures. However, according to Google trends throwback Thursday’s popularity didn’t spike until February 2012. This trend has reached popularity through celebrities such as Kim Kardashian and Molly Sims.
Selfie, a self-portrait photograph typically taken with a cell phone or digital camera, has become a trending topic on Instagram becoming the “word of the year” as announced by Oxford English Dictionary in November 2013. Selfies attract a wide range of viewers as seen by the second most-liked picture on instagram from Justin Bieber’s instagram account. Bieber’s selfie with Selena Gomez acquired 1.82 million likes. This trend has sparked interest within the music industry as well with the debut of the song “Selfie” by The Chainsmokers in January 2014.