Facebook Inc (FB): Why Investors Should Care

Every day, hundreds of millions of photos are uploaded to Facebook Inc (NASDAQ:FB), according to a recent statement from the company to Huffington Post.

Facebook Inc (NASDAQ:FB)

Have you ever thought about how this might impact those doing the uploading? Certainly, years of uploading photos to Facebook would make leaving the social network difficult — especially since they likely spent hours tagging friends and friends spent hours tagging them. People would certainly think twice before they got up and switched to another platform.

Sure, there are ways to transfer photos from Facebook to sites like Google Plus. CNET author Sharon Vaknin described one process that could take anywhere from several hours to days. But what about transferring all those tags, comments, and likes? Transferring those won’t be very easy.

Photo sharing, of course, is just one aspect of Facebook’s network effect, but it’s an important one. The company’s acquisition of Instagram shows exactly how important Facebook feels photos are to its future.

Now, with the addition of shared photo albums, Facebook just made the company’s network effect even stronger.

Facebook’s shared photo albums
On Monday, Mashable reported that Facebook is rolling out shared photo albums. The feature allows up to 50 contributors who can each share up to 200 photos to a shared album — that’s 10,000 photos total.

Source: Mashable.

This new feature allows albums to cover far more ground than they could before, with limitations to just one contributor and 1,000 photos per album.

The technology certainly isn’t new. Google Plus has a similar feature that allows guests at an event to upload and instantly share photos taken at the event in one collective album. But Facebook has more than 1 billion monthly active users and about 700 million daily active users to begin to put this feature to work.

According to Mashable, “The new feature was built during one of Facebook’s companywide hackathon sessions, a time where employees set regular work aside and dream up new prototypes for the platform.”

Why investors should care
This hackathon certainly produced some lasting value for the company: 10,000 photos shared by 50 contributors with tags, comments, and likes will undoubtedly increase switching costs for Facebook’s users.

When it’s all said and done, Facebook’s lofty valuation is about future expectations. In order for the company to live up to this valuation, it’s going to need to endure the test of time. That’s why I’m always on the lookout for new Facebook features that strengthen its network effect. And shared photo albums do just that.

The article Facebook’s New Shared Photo Albums and Why They Matter originally appeared on Fool.com and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Facebook.

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