systrom-_2

The tech media is buzzing today with a very junior high-like spat between Instagram and Twitter.

In case you missed it, Instagram has disabled Twittercard integration, which means you can no longer view your Instagram photos on Twitter. It’s another step in a turf war between the two. It’s not unlike two kids sitting in the back of the car. One touches the other and then says, “What!? I didn’t do anything!”

Only this turf war has real ramifications for two multibillion companies and their hundreds of millions of users.

Kudos to Kevin Systrom for at least owning up to it, saying plainly he did it, because he wants you to view your photos on Instagram, not Twitter. He also said he was not working at his new boss, Mark Zuckerberg’s, behest. This was his call, as he said today on stage at Le Web.

Knowing Systrom, I believe him.

First, you have to consider the culture that’s brewing at One Hacker Way. As we’ve written before, with regular all-hands and pep talks, Zuckerberg has adeptly turned Facebook’s embattled stance on the outside and turned itself into an almost religious underdog culture on the inside.

The mind-meld between the two was clear during Systrom’s fireside chat with us back in October. Systrom bleeds Facebook blue (as opposed to lighter Twitter-blue). The idea that Zuckerberg walked down to Systrom’s office and ordered him to do this is absurd — and misunderstands both Systrom’s deep “you don’t own me” streak and Zuckerberg’s management savvy.

Still, while Zuckerberg is clearly not calling the shots here, being a part of Facebook has definitely effected Systrom’s thinking.

Make no mistake: This move wouldn’t have been made had Instagram not been bought by Facebook. But not for the over-simplistic reasons many people think.

I interviewed Systrom as he was negotiating with Facebook and again in his first interview after the deal. Post-acquisition, he was a different man. It was clear that the tie up has given Systrom the surge in users, the confidence, and the safety net to go big and go ballsy. This isn’t merely about bolstering Facebook in the arms race between the two largest social networks. This is about bolstering Instagram, with Facebook’s help. There’s a subtle but important difference there.

When Dustin Moskovitz appeared at PandoMonthly just before Facebook’s IPO, he said that he and Zuckerberg were always about two years ahead of everyone else in the way they thought about Facebook. Systrom is very much the same way with Instagram right now. The security and resources of the acquisition, and his long talks with Zuckerberg about how the two of them can change the flow of information and communication, have lead him to think much bigger about his property than he did last spring.

Back in October, he spoke not about what Instagram was doing now, but what it would do. And the vision was remarkably different. He wanted Instagram to be more than just a place where rich kids show off, but a place where news and information is shared in new ways. Where important and meaningful events take place. A place a lot like…Twitter.

Systrom’s size ambitions were apparent too. Unlike, say, Foursquare he’s not content to have a small but impactful mobile social network of a “mere” 100 million people. He wants to be the size of Twitter or even Facebook itself. Not surprising, then, that he’s already expanded Instagram from mobile-only to the Web, as 1 billion people aren’t getting iPhones anytime soon.

The “news” today that Instagram stay independent from Facebook for a long time wasn’t so much news as it was, “um, duh” for anyone who’s been listening to the way Systrom is talking. The reason Facebook paid $1 billion for the small company was because it posed a real threat of becoming the third big global social network. Every single thing Systrom is saying and doing points to the fact that the acquisitions has — if anything — emboldened him towards going after that goal. Unlike almost every other acquisition Facebook has done, he is not melding into the borg.

People who see these moves as part of Systrom being Zuckerberg’s bitch are totally missing the point and underestimating Systrom’s ego, determination and vision. Systrom and Zuckerberg are more like aligned nation states. And Zuckerberg — who has turned into a savant at motivating and managing talent– wisely treats him more like fellow CEO than employee.

And, yes, that’s bad for Twitter. So was not getting Instagram to begin with. But it’s not fatal. Twitter can introduce filters, and it’ll simply bifurcate the market. People who take pictures mostly to share them on Twitter will use it. People who love the uniqueness of Instagram’s own social network and prefer to share on Facebook will continue to use Instagram unfazed by the change.

The big question is how many of those 100 million users are in the former camp and how many are in the latter. I’m one of those Instagram users who got hooked on the service, because it was a way to share cooler looking images on Twitter. I’m way more of a Twitter power user than a Facebook power user. I won’t stop using Instagram, but if Twitter releases a product that mimics it and works on Twitter, that’s definitely more valuable to me, and I will use Instagram less.

But most likely, I am in the minority. As are a lot of the people on Twitter today, crying out about the news. I’m certainly in the minority in my household. My nanny is a Facebook user first and almost never uses Twitter. She shrugged at the news. My husband values his Instagram network more than the others, and rarely shares on Twitter as is. He deemed the idea of “Twitter filters” as immediately lame. Tech insiders keep talking about how bad this is for users. But we’re not always representative of the whole. For many, it may not be.

But whether the move proves bad for Instagram depends on whether Systrom’s view of the company is — like Zuckerberg and Moskovitz back in the day — simply a year or two ahead of how the market views Instagram, or whether his view is completely misguided. But the beauty of the move is that it doesn’t totally depend on that, because of the Facebook tie up.

Sure Instagram has 100 million users, but how many of them are there for Instagram’s own network effects and how many of them are there because Instagram wisely leveraged the network effects of Twitter and Facebook early on?

And here’s where the acquisition by Facebook matters: No doubt, Facebook is driving a lot of Instagram’s growth right now. It had only 30 million users at the time the acquisition was announced. Those users who’ve flooded in because of Facebook clearly aren’t there for Instagram’s own network effects. If they are there because of Facebook, this move may not matter.

This much is sure: Instagram became popular, because it sat in between Twitter and Facebook and leveraged them to build its own network. That playbook is gone. It’s burned. It’s ashes now, as Systrom’s move makes clear.

There’s one little potential kink that will be interesting to watch. There is one group on Instagram that is more important than their numbers: Celebrities. And celebrities have loved Twitter more, longer, and in greater numbers than they love Instagram. Celebrities are the big edge that Twitter has always had over Facebook. Zuckerberg and his product team have simply never done a good job courting them.

My guess is many of them would rather use Twitter’s photo filters to share a shot with a fan, rather than share an Instagram photo with a smaller, limited social network.