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Instagram goes back to its old ways as other photo-sharers rub their hands

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By Noel Young, Correspondent

December 21, 2012 | 4 min read

Desperate to prevent an Instagram meltdown, co-founder Kevin Systrom, has said that where advertising was concerned, the company will revert to its previous terms of service, which have been going since October 2010.

Instagram: As you were!

As users poured into rival photo-sharing apps, , Systrom wrote In a blog post , “Rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work.”

The proposed change in policy that caused uproar suggested Instagram would share users’ data — like their favorite places, bands, restaurants and hobbies — with Facebook and its advertisers to better target ads.

Worse, the new terms of service suggested users’ photos could be used in advertisements, without compensation and even without their knowledge. That is very definitely NOT going to happen.

The terms of that now-scrubbed user agreement said, “You agree that a business or other entity may pay us to display your user name, likeness, photos (along with any associated metadata) and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.”

Systrom at first told Instagram users on Tuesday that the new policy had been misinterpreted. “It is our mistake that this language is confusing,” he wrote, and he promised an updated agreement.

But that statement wasn't good enough for the fans . With more people leaving the service, the company, bought by Facebook for $735 million this year, reacted again by returning to the old rules.

In his blog late Thursday, Systrom wrote: “I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos — you do.”

Users have been turning in thousands to other photo-sharing applications.

Pheed, an Instagram-like app that lets users monetise their own content by charging followers to see their posts, gained more users than any other app in the United States on Thursday. Subscriptions quadrupled this week . In 24 hours users uploaded 300,000 new files to the service — more uploads than any other 24-hour-period since Pheed launched six weeks ago.

Flickr, Yahoo’s photo-sharing service, redesigned last week , was also making hay.

Florian Meissner, founder of a photo-sharing service in Berlin called EyeEm, said usage skyrocketed on Tuesday after Instagram released its new terms of service. Daily sign-ups had increased by a thousand percent and were still climbing.

Starmatic - same name as the toy Kodak camera - also said that the volume of photographs funneling through the application was at an all-time high this week.

“Starmatic has benefited from a massive buzz and arrival of disappointed Instagramers,” said Jean-Philippe Evort, one of the founders .

However, Instagram, is still the giant: it claims to have more than 100 million members who have uploaded upward of 5 billion photos using its service.

The company will still be tweaking its privacy policy to quell users’ fears that their photos might pop-up on third-party sites without their consent, said Systrom.

But after all that , how will Instagram make money? Systrom did not say - and although it's a free service observers believe they have to make money somewhere.

Cheeky rivals are nipping at its heels. Camera+ said in an app update, “We’ll never do shady things with your shared pics, because it just isn’t right. On that note, happy Christmas to all, and to all a good night!”

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