Get ready for ads, Instagram users
The photo-sharing app hasn't earned a cent, and that's something corporate parent Facebook is determined to change.
As The Wall Street Journal noted, the wildly popular app has never made a cent. But Instagram's director of business operations, Emily White, told the paper the site will be ready to begin selling ads within the next year.
That's a stark change for Instagram, which "didn't even have the outlines of a business" when Facebook acquired it, The Journal reported. The enterprise employed 32, none of whom were involved with customer service, and only one person was working with the thousands of brands that were starting to use Instagram to promote themselves.
After the acquisition, White's team cataloged the major bands on the site and then met with the companies, according to the paper.
Figuring out how to balance the needs of advertisers with user expectations will be the key. Another challenge will be getting companies to pay for a service they get free today.
"After years without ads, Instagram's big risk is alienating its members -- especially its large base of teen and young adults, who are coveted by marketers," according to The Journal. "Too much overt marketing could clutter the service, undermining one of its strongest selling points."
Users are already starting to grumble. Last year, they denounced the site for changing its terms of service in a way that suggested user content could be turned into ads. Instagram later backtracked on its efforts.
Luckily for White, Facebook has a market capitalization topping $107 billion, so it doesn't immediately need Instagram to get into the black. But Wall Street, which has pushed up Facebook's shares 135% over the past year, will demand progress to justify the social network's lofty valuation.
Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter @jdberr.
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