👉 Background: Instagram, the social media app that was originally called Burbn - B-U-R-B-N, was acquired by Facebook back in 2012 for $1 billion USD. Since then, it has become one of the cornerstone apps in the Meta group of companies, with over 2 billion monthly active users.

👉 What happened: Now, Instagram is testing a new 'feature' that will force its users to watch ads while scrolling through Reels and Stories. The “ad break” feature is similar to the free version of YouTube, which requires users to view ads before and in the middle of watching videos.

👉 What else: For now, this ad-break feature is just a test, but it goes to show the extent that Meta is willing to go to continue increasing their ad revenues.

What's the key learning?

💡Tech companies need to strike a very careful balance between user experience and revenue. While more ads means more revenue, it also means more frustrated Instagram users.

💡 Instagram spokesperson said “We’re always testing formats that can drive value for advertisers”. No mention of its 2 billion monthly active users though.

💡This is exactly what happened to MySpace after it was acquired by News Corp in 2005. It focused on growing revenue rather than improving its tech platform and usability, leading to intrusive ads and a poor quality product. This ultimately led to its downfall and forced NewsCorp to sell the business for just $35 million in 2011.