Instagram’s Purchase by Facebook, Influencers and Reverse Network Effects

From my prior blog post & pay special attention to the underlined “photos uploaded per influencer”:

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I thought that the key metric to see when Facebook will start falling is when US visitors will drop since the US media drives trends. But apparently its a subset of that – all that needs to happen is a specific influencer subset (e.g. “white middle class kids”) to start getting bored and the whole “knitting scarf” will unravel. To be even more specific, the key metric IMHO will be “status updates or photos uploaded per influencer” If that starts dropping, then that might be the time to short Facebook (if they were public!) 

These influencers are also even more important because they are also the content producers. So, a reverse network effect accelerates as the influencers stop producing content and the other followers, seeing less interesting content, follow the influencers.

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Zuckerberg clearly sees the Influencers going to Instagram and as Chris Dixon said – Giving up 1% of your market cap to take out your biggest threat is a savvy move 

 

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