Facebook Buys Instagram for $1 BillionPosted: April 9, 2012
The heavy baller, Facebook made a public offering today, April 9, for its first big purchase. The popular photo-sharing application, Instagram has been causing a commotion on the social media scene and of course Mark Zuckerberg was not far behind.
On Monday, both companies expressed their official commitment to run Instagram as an independent service, while Zuckerberg explained that Instagram would continue to work with rival social networks, allowing users to post on other services, enabling them to opt out of sharing on Facebook.
This is a good policy, due to the initial fan base of the brand which may want to leave out their Instagram photo’s on Facebook. The question lies, whether or not this was an intelligent decision on Facebook’s end due to the fact they have yet to go public. However, Mr. Zuckerberg feels strongly about the decision, because they’ve been focusing on building the best experience for sharing photos, and with Instagram, “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,” which he posted earlier on Facebook himself. Facebooks initial public launch, is expected to take place next month, causing a lot of investors and buyers to make a name for themselves.
From the Instagram side of things, chief executive, Kevin Systrom, reiterated plans the preserve the service’s functionality and is looking forward to taking the most out of their new parent company’s resources. There were also a lot of other investors in the market for the fast growing photo-sharing application.
Last week, Instagram had a financial round worth of more than $50 million, with names such as Sequoia Capital, and early backer of Google, Greylock Capital, and early investor of LinkedIn, and Thrive Capital, the firm run by Joshua Kushner, all being in the running for the large purchase.
This is the news release from Facebook:
“Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.
“The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.”
And from Mark Zuckerberg’s statement:
“We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.”