Two Big Reasons Why Instagram + Hipstamatic = Match Made In Heaven

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Today Fast Company has a story on how two of the hottest photo apps for iOS, Hipstamatic and Instagram, are going to announce a partnership that will see Hipstamatic become the first third party to port photos to Instagram’s own photo-sharing social network.

The deal, exclusive for now, represents a big step ahead for both companies, but here are perhaps two of the biggest reasons why that is the case:

The first has to do with Instagram as a social network. I think the company is looking to give people more reasons to use its own photo stream more, and to make it a destination in itself. Up to now, so much of Instagram has been about taking pictures and sharing them elsewhere, Twitter being one prime example. (Last week, Eric pointed out that when you compared Instagram and Twitter photos tweeted during the SXSW event, Instagram accounted for one-third of all the pictures.)

That’s fantastic, and a great way of spreading the Instagram love.

But I think Instagram will have to spruce up its own walled garden if it hopes to build a revenue generating business out of it one day — whether that’s around ads, or brand campaigns or whatever. I don’t know how many people use that photo stream right now — but I can bet a fair few have been like me and have hardly ever used it. I’m sure it’s growing (as it is for me), but adding more pictures and more traffic routes into going there will definitely help.

The second has to do with yin yang. These two sites, seemingly so similar on the surface in their offerings of slick vintage filters to jazz up your mobile pics, are really very different.

Hipstamatic is a paid app, at $1.99 a pop, and last year made around $10 million in revenue from those downloads and other services.

Instagram, meanwhile, is a free app, with no paid services, but an enormous user base of 27 million people, built so far only around iPhone usage.

It’s not clear how many users Hipstamatic has but I think you can safely bet that it is nowhere near the numbers Instagram has. One of the bonus points for Hipstamatic in this partnership is that every photo that shows up in the Instagram stream will come with a link to buy the Hipstamatic app if the user does not already own it. And that may well get developed into options to buy prints and more. That means more users for Hipstamatic. And you know, Instagram might even start piggybacking on those services, too.

Yes, there may be many more coming to the Instagram party after this (Path, perhaps?). But for now, Hipstamatic and Instagram couldn’t be more complementary, and perhaps a sign of what each needs to really grow up.