Facebook buys Instagram for USD1 billion
10 April 2012 10:59
Facebook is to pay $1 billion in cash and stock for the purchase of photo sharing application Instagram.
Instagram enables users to apply filters to photographs taken on smartphones and share them with other users online. It was launched in Ocotber 2010 and currently has 30 million users but no revenue.
Facebook's purchase of Instagram is by far the most expensive acquisition by the social networking website and comes a month ahead of its planned NASDAQ listing.
The deal was announced last night by CEO Mark Zuckerberg who said that Instagram would continue to be run as a separate company.
"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," Zuckerberg said in statement posted on his Facebook page.
"We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook."
Apart from the enormous price tag, which values two-year-old Instagram more than the 161-year-old The New York Times Company, the purchase is also the first time Facebook has acquired a service with such an large an established user base and Zuckerberg hinted the deal will be a rare exception.
"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all," he said.