After the recent change in the terms of service on Instagram, many users were appalled at the idea that their precious social photos may be sold to advertising firms or companies. Some were annoyed that their Christmas turkey may make them a Walmart low-cost meals target, while others were annoyed because the terms did not mention anything about user revenue.

Instagram’s CEO Kevin Systrom has blogged about this and told users that they do not have intentions of selling their photos, although they are looking at ways to start making money from the social photo giant. Instagram has over seventy million signups and almost ten million active users, monetizing that audience could make huge amounts of revenue.

Kevin Systrom has said that banner ads and typical advertising is not what Instagram needs, that is why they are looking into new ways. There are many ways that Instagram could advertise and many ways they could target users, hashtags, photo identities, user likes, user favorite Instagrammers.

With many companies on Instagram already, like Nike and Starbucks, there could be clever ways to buy the product that they are showing off in the photo from the app itself. This is complex advertising, especially in the case of Starbucks, but it could work similar to how Foursquare advertising works.

This seems to be users wanting a slice of the action, or at least a choice in the matter. The problem is users take for granted that Instagram is a free service and they need to make money somehow. While selling your photos to unknown ad agencies may not be the cleverest idea, Instagram should be working to make some money.

With Facebook ruling over Instagram now, we can see them pulling the strings on advertising and Instagram will need to deliver something eventually. With a $1 billion investment in the company, Instagram need to start showing money as well as user traffic.