Instagram acquires video app startup; Facebook overhauls Gifts

|About: Facebook (FB)|By:, SA News Editor

Instagram (FB) has bought Luma, developer of a video capture//sharing app that didn't get much traction in a crowded field in spite of having some unique image-stabilization and video-filter features.

Luma's app is being shut down, and its team is joining Instagram, whose recently-launched video-upload features (they include a stabilization tool) are proving popular, but also continue to face intense competition from Twitter's Vine.

Though it's taking its time in monetizing Instagram, Facebook appears intent on providing the photo-sharing service with more R&D resources. The company recently made Peter Deng, a product manager who helped develop Facebook's Chat, Groups, and Messenger apps, Instagram's Director of Product.

Separately, Facebook's Gifts e-commerce product is removing support for physical gift purchases. Gifts will now only offer gift cards from merchant partners, and a general-purpose Facebook Gift Card that can be used with multiple merchants. As it is, gift cards made up 80% of the sales recorded by Gifts, which has only seen modest success thus far.

Previous: ITG Research estimates, comScore data