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Facebook Inc (FB)’s Copycat Just Worked

Investors may have noticed that Facebook Inc (NASDAQ:FB) has been in an imitative mood recently, replicating popular social-media features and launching rival offerings. Facebook Inc (NASDAQ:FB)’s most direct rival is easily Twitter, and Facebook just adopted hashtags. Facebook’s Poke app was a ripoff of Snapchat, and Instagram’s new video service is a direct shot at Twitter’s growing Vine service.

Facebook Inc. (FB)

Well, copying a rival can sometimes pay off. Instagram video has only been out for about a week, and it’s already taken a huge bite out of Vine. Social analytics researcher Topsy tracks shared links on Twitter, and the number of Vine links shared on Twitter has plunged since Facebook Inc (NASDAQ:FB)’s entry.

Source: Topsy.

Instagram links shared on Twitter spiked briefly but tapered off and are about flat overall. Vine links peaked near 3 million shares earlier this month, but have since dropped to under 1 million.

Vine’s value proposition of looping six-second videos is a little questionable. According to Topsy, the most popular video right now is a clip about using gummy worms as currency. That hasn’t stopped Vine from garnering considerable attention as a possible video advertising platform.

Facebook Inc (NASDAQ:FB)’s acquisition of Instagram has been controversial since the photo sharing service had exactly $0 revenue at the time the social network bought it. It was the user base that Facebook was interested in. Adding a video service won’t immediately help the subsidiary generate revenue quite yet, although anything that hurts Twitter is certainly good for Facebook.

Facebook Inc (NASDAQ:FB) has been working on launching video ads, effectively bringing TV ads to user News Feeds. Video ads have been reportedly delayed until this fall because Facebook needs more time to work on complementary features that it wants to release concurrently.

The company knows that it needs to tread carefully with the user experience. The last thing people need is more ads that begin playing automatically in some background tab. Thankfully, Facebook Inc (NASDAQ:FB) will have them play silently when scrolled over.

Video ads are the next battleground in social media, and Instagram just posted a victory over Vine.

The article Facebook’s Copycat Just Worked originally appeared on and is written by Evan Niu, CFA.

Fool contributor Evan Niu, CFA, has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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