Facebook CEO Mark Zukerberg has declared the acquisition of a popular Photo sharing application Instagram on Monday, 9th April 2012. The deal has been finalized at $1 billion (cash + stock) and expected to be accomplished by the end of this month. Along with the application, a team of nine people of Instagram will be brought to the social networking giant Facebook.
Mark has stated, “ We have been focusing on building the best experience for sharing photos with your family and friends. With this deal we will be able to work more efficiently, and offer best of the best experience of sharing mobile photos with people.” He also said that the company will be utilizing the features of Instagram, and develop the app independently rather than just integrating everything into the Facebook. Furthermore, Facebook is planning to keep the features within the app that will allow users to share photos on other social networks too. Zukerbers wrote in his Facebook Timeline that providing the best photo sharing experience is one of the major reasons why millions of people love Facebook and it would be worth bringing these two entities together.
On the same, Instagram’s CEO Kevin Systrom stated that they will preserve the service’s functionality and looking forward to invest the new parent’s company’s resources and talent. Instagram, founded in 2010 by Mike Krieger and Kevin, has only few employees working for this widely popular photo app. Intagram allows users to add typical filters and visual flair to their photos they clicked with their smartphones. Its android version was just released last week that framed up more than 1 million downloads in just 12 hours.
Before this deal, Facebook was known for small acquisitions, but Instagram’s flowing momentum has compelled the social network giant to quickly put together a billion dollar offer. On the other hand, Instagram closed a financing round worth more than $50 million last week that valued the company at $500 million, according to a source involved in the deal. Their investors were Sequoia Capital, an early backer of Google, Thrive Capital, the firm run by Joshua Kushner, and Greylock Capital, an early investor of LinkedIn. With this deal with Facebook, Instagram’s investment has now doubled in value.
This deal would be a milestone for Facebook as well as for Instagram, as Facebook will be first time acquiring a product or company with millions of users. On this deal Zukerberg’s stated “We are exited to work with the talented team of Instagram and looking forward to the great new experiences we are going to be able to build together”.