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Even Now, Facebook Resembles MySpace

Thursday - 4/25/2013, 3:53am  ET

Even as performer Justin Timberlake and his partners work to remake MySpace, memories remain of what that troubled network became: an interesting music discovery mechanism that also played host to trolls who could maintain anonymity via obscure usernames.

Instagram is constructed similarly, and that poses a problem for parent Facebook , says Tim Beyers of Motley Fool Rule Breakers and Motley Fool Supernova in the following video.

According to reporting by The Washington Post, some anonymous Instagrammers are hosting online "beauty pageants" where users are asked to rate thousands of girls who submit pictures. Not college girls or young professionals, but 12- and 13-year-olds, the Post says.

Not surprisingly, comments can get nasty. The resulting fallout is sure to be a concern for parents. But investors should also take note: Facebook gained prominence by requiring participants to use their real names. Google last year asked the same of its YouTube members. Keeping these outlets safe for public expression is key to their long-term value, Tim says.

Should Instagram require users to go public? Please watch this short video to get Tim's full take, and then leave a comment to let us know how you think Facebook should handle this fast-growing social subsidiary.

For further analysis of Facebook's social ambitions, try our newest premium research report in which we dissect the social network's expanding empire and tell you what the company is really worth and whether there's reason to "like" the stock for your portfolio. Access your report now by clicking here.