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TheStreet Open House

Expect Facebook to Lose a Ton of Money on Instagram

When you're Facebook, you can say something really, really dumb such as:

You agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.

And then backtrack by saying, That's not what we really meant! As is often the case, David Pogue summed up that inanity quite well in The New York Times.

Bottom line, there's not enough there there with Instagram to give it the license Facebook has to play chicken with its user base.

What does Instagram do? Nothing that's all that exciting. It takes the idea of adjusting the tint or contrast on your old television set and applies it to "photography" on mobile devices. Talk about ZERO barriers to entry. Twitter had to rush photo filtering out last week and it's pretty close to being as "good" as Instagram is now.

We're getting to a point with apps where only the best, most stimulating, most versatile and most useful will survive. One-trick ponies such as Instagram will fall by the wayside.

What's the future there? Allow a brand to promote a picture? Please -- Instagram is the glorified Foursquare of photo streams in the making.

I'm not sure why I ever used Instagram. Sucks to admit this, but I think it was because everybody thinks it's so cool. I'm guessing that after millions of Instagram users freaked out Tuesday they asked themselves the very same question -- why do I use this app?

The answer will ultimately spell Facebook's first major writedown as a public company and Zuckerberg's second biggest mistake after focusing on mobile two years too late.

--Written by Rocco Pendola in Santa Monica, Calif.

Rocco Pendola is TheStreet's Director of Social Media. Pendola's daily contributions to TheStreet frequently appear on CNBC and at various top online properties, such as Forbes.
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