This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Expect Facebook to Lose a Ton of Money on Instagram

NEW YORK ( TheStreet) -- I tend to agree with the way Mark Zuckerberg handles most things at Facebook (FB - Get Report).

But I'm beginning to wonder what in the world he is doing with Instagram. Maybe he's not doing anything. The other day a friend suggested that because it's newly acquired, CEO Kevin Systrom might still be calling the shots at the sociophoto network. (When somebody at CNBC starts using that new word, remember where you heard it first.)

I scoff at the notion of Zuckerberg not taking immediate control of Instagram, but it's apparently not all that far-fetched. I understand that's the way things rolled in the early stages of the Google (GOOG - Get Report)/ YouTube integration.

If Zuckerberg is saying, we're not going to interfere, keep doing what you're doing, he better channel Steve Jobs and rethink the strategy.

In the span of just over a week, Instagram or Facebook or some combination of the two made a pair of bonehead moves.

I discuss the first one -- taking full Instagram functionality away from Twitter -- in Facebook Acting Like a Twit On Instagram. TheStreet's Chris Ciaccia nicely covers the most recent bungle -- Instagram's terms-of-use snafu -- in Facebook's Instagram Catches Hell From Users on Privacy Changes.

Let's take this slowly . . . Facebook made a massive mistake making such a large bet on and apparently having so much confidence in Instagram.

Here's where I think Zuckerberg -- whether he's calling the shots or not (and he must have at least some broad oversight) -- is getting it wrong: He's putting Instagram in the same league as Facebook.

Dissing Twitter was a bold, but bad move. I explain why in the first of the two above-linked articles. And pulling a fast one on privacy doesn't fly when you're not special. Facebook can do this -- it has several times -- because it's Facebook. That's why the social network never missed a beat after the many times Zuckerberg played fast and loose with privacy.

Facebook is sticky; it's addictive. Most of its users aren't going anywhere and, for every one that does leave, several others, pets and infants included, take that spot.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $119.15 1.10%
GOOG $711.22 1.40%
TSLA $214.31 1.30%
YHOO $37.21 0.73%
AAPL $92.58 -0.71%


Chart of I:DJI
DOW 17,720.91 +60.20 0.34%
S&P 500 2,056.96 +6.33 0.31%
NASDAQ 4,732.14 +15.0460 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs