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Facebook to challenge Twitter's Vine with Instagram video

June 20, 2013|By Jessica Guynn
  • An Apple iPhone 4 running the Instagram app.
An Apple iPhone 4 running the Instagram app. (Julian Stratenschulte…)

MENLO PARK, Calif. -- Can Instagram be to video what it is to photographs?

Facebook is counting on it.

The giant social network is expected to announce Thursday that its popular photo-sharing app Instagram is adding video.

Instagram, which has more than 100 million users, will offer users the ability to shoot and share short videos in an effort to tap into the growing popularity of mobile video, according to media reports.

Facebook has scheduled a news conference at its headquarters here Thursday morning.

"A small team has been working on a big idea," the invitation to the news conference said last week. "Join us for coffee and learn about a new product."

Facebook is playing catching up, trying to tap into the Internet's latest medium for self-expression.

Adding video will heighten competition for marketing dollars with Twitter. It's a direct swipe at Vine, the simple-to-use filmmaking tool that lets anyone create six-second videos that run on an endless loop.

Twitter bought Vine in October and debuted the video-sharing app in January. It has soared in popularity, grabbing the attention of teens, celebrities and brands that want to reach consumers on mobile devices.

In just four months after launching on Twitter, Vine racked up 13 million users who collectively share millions of videos each day, rivaling the swift rise of Instagram. Instagram took nearly a year to reach 10 million users. That's why many people have dubbed Vine the "Instagram for video."

"People like consuming video, sure, but it's almost shocking how much people love making videos too," Jordan Crook wrote this week on the technology blog TechCrunch. "When I see something cool happening out in the world, Instagram is no longer enough."

In April 2012, right before its rocky debut as a publicly traded company, Facebook bought Instagram for more than $700 million right from under Twitter's nose.

Nursing its wounds, Twitter went on the hunt for the next big thing. Twitter co-founder Jack Dorsey brought Vine to the attention of Chief Executive Dick Costolo.

Twitter thinks about six seconds the way it does about 140 characters: From that forced brevity flows unbridled artistic expression.

Now Vine is popping up everywhere, part of a wave of simple, expressive social media platforms such as Snapchat and Tumblr that have caught on big time with teens and young adults. Yahoo, also in search of that elusive younger audience, last month bought Tumblr, which is populated by animated GIFs, for $1.1 billion.

This is not an app that is just popular in Silicon Valley, reports self-described hacker John Muellerleile. After compiling and reviewing millions of Vines, Muellerleile concluded that a lot of "actual people" use it. Vine is one of the most downloaded free apps for the iPhone. This month, Vine rolled out an Android app, too.

"All different walks of life, geographies, incomes; all genders, ages, races, backgrounds. They use it in all kinds of ways, sometimes hilarious, ridiculous or strange, but all decidedly human," he wrote.

He said Vine's popularity can be attributed to how natural and intuitive it is to use (much like Instagram).

"When you go to make a Vine, it gives you a view of what it will record, recording only while your finger is actually touching the screen, stopping when you take your finger away. You can take as many shots as you want, but the total duration cannot be any more than six seconds."

Observers say Facebook's move into short-form video may fuel Vine's popularity by bringing the concept to an even larger audience.

Its late entry into video shows just how challenging it can be for established Internet players to keep up with the quick-fire innovations of nimble young startups.

So far, Facebook has not had much luck with copycat products. If anything, Snapchat is more popular since Facebook debuted a very similar product called Poke.

But some analysts are bullish on what video could do for Facebook.

Wedbush Securities analyst Michael Pachter said Vine is still a product in search of a mainstream audience.

"It might actually catch on as part of Instagram," Pachter said.

But some say they doubt that Instagram video will pose a major competitive threat to Vine.

"It's hard to think of Facebook eating into Vine in a meaningful way. Vine is just so good," said a Silicon Valley technology executive familiar with Facebook and Twitter who spoke on the condition of anonymity to preserve his relationships.

Facebook could be well positioned to benefit from the filmmaking tool. Video is already one of the top draws on Facebook. Research firm ComScore says Facebook was the second-biggest U.S. online video site in May 2013, with 60.4 million unique viewers watching 727.4 million videos in the U.S. alone, second only to YouTube.

"We see online and mobile video as a significant growth opportunity for Facebook, and have noted recent strong growth for Twitter's Vine mobile video app," S&P Capital IQ analyst Scott Kessler said.

Facebook isn't just trying to keep a tight grip on its 1 billion-plus users whose attention can wander. It's also looking to give marketers the ability to target Facebook users with video ads. It's expected to roll out video ads in the fall.

The video advertising market is expected to surge 41% to $4 billion this year, according to research firm EMarketer Inc.

Marketers have already had success using Vine to promote summer blockbusters such as "Monsters University" and "World War Z" by creating short bursts of digital entertainment.

Don't expect Instagram to play well with Twitter. Instagram removed its photos from Twitter feeds, forcing Twitter users to click through to its website to see images. Vine users can post videos to Facebook but the videos don't play on Facebook.

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