Facebook acquires Instagram for US$1 billion

Thursday, April 12, 2012

The popular social networking site Facebook agreed to purchase the Instagram photo-sharing mobile app for US$1 billion in cash and stock Monday.

The app, which can be used to apply faux-vintage filters to photographs, allows users to share photos with one another both directly and through posts to social networking sites. Instagram was founded less than two years ago by two Stanford University graduates near San Francisco, California and the purchase is one of the largest acquisitions in Facebook history following after a failed takeover bid in early 2011 which had been declined by Instagram.

Facebook, despite its prominence as the largest website for social networking in the world, has had difficulties expanding into the mobile market, particularly the realm of mobile advertising. As of yet, Facebook lacks an advertising platform for its apps and has yet to capitalize off the boom in mobile phone use that Instagram is intertwined with.

	We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience.
—Mark Zuckerberg

Facebook co-founder Mark Zuckerberg noted the importance of the ability to post to multiple social media sites at once in a post. He wrote on his personal timeline, "We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience." He said Facebook "plan[s] on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook."

Many other small services that Facebook has acquired, namely Gowalla, Hot Potato, and FriendFeed, were all shuttered shortly after acquisition. The co-founder of Instagram, Kevin Systrom, in a company blog post, has denied any claims that Instagram would share the fate of these past services. "It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network. We’ll continue to add new features to the product and find new ways to create a better mobile photos experience," he wrote.

Many reasons have been put forth for the purchase, and Zuckerberg commented, "for years, we've focused on building the best experience for sharing photos with your friends and family. Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests."

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Sources

Jenna Wortham. "Facebook to Buy Photo Sharing Service Instagram for $1 Billion" — The New York Times, April 9, 2012
Kevin Systrom. "Instagram + Facebook" — Instagram Blog, April 9, 2012
John D. Sutter. "Will Facebook ruin Instagram?" — CNN, April 9, 2012
Jeremy C. Owens. "Biz Break: Facebook buys Instagram, and Microsoft buys AOL patents in Merger Monday megadeals" — Mercury News, April 9, 2012
Molly Wood. "Facebook buys Instagram...but for what?" — CNET, April 9, 2012

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