Mobile, Instagram | featured news

Instagram, the popular photo-sharing service that Facebook bought this year, is the target of a storm of outrage on Twitter and other sites after a change in its user agreement hinted that it might use shared photos in ads.

Kevin Systrom's smartest move was to sell Instagram to Facebook early, before having to deliver even an iota of revenue. My prediction is that we’ll look back on Facebook's acquisition of Instagram as a bust—much in the same way we now view News Corp.’s purchase of Myspace, AOL’s purchase of Bebo, and Excite@Home’s purchase of Blue Mountain Arts.

The new app is similar to Instagram, the photo-sharing app Facebook is in the process of buying for $1 billion. The acquisition, however, has not yet been completed, and Instagram's employees did not work on the Facebook app. Facebook has said it expects the Instagram app to close sometime this year.

Can a two-year-old photo sharing app really be worth $1bn? It would buy you some some 2,100 Rolls Royce Phantoms. Or 200 million mosquito nets to fight malaria. Or the whole of the New York Times company (with $50m change to spare). If you are Microsoft, it buys you some 800 AOL patents to fight the next patent war.

Instagram, the iPhone photo-sharing app that turns almost anyone into an artful photographer, is growing at an astonishing rate.