One billion US dollars worth in cash and stock - that's how much Facebook paid for Instagram.
Facebook CEO, Mark Zuckerberg, announced the acquisition when he posted the news on his Timeline yesterday. The bold transaction is by far the most expensive purchase the social network has forked out for a smartphone application to date. And with it, Facebook has also earned themselves a devoted Instagram community of more than 30 million users worldwide. Point is how many of these users would abandon the Instagram ship after Facebook's procurement is yet another question altogether.
Although many were reeling from the news, it isn't entirely surprising that Facebook has set its sights on Instagram given that the giant social network has been habitually criticized for its awkward and lumbering mobile apps. Perhaps Facebook was simply trying to learn a thing or two from the photo-sharing company? Instagram was founded by Kevin Systrom and Mike Krieger, who released the app for Apple devices in October 2010. It was only made available on the Android Market (Google Play) recently. Incidentally, the Instagram sale also took place right on the eve of an anticipated initial public offering from Facebook that could value the Menlo Park company at a whopping US$100 billion.
"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," said Zuckerberg in a Facebook post. "We don't plan on doing many more of these, if any at all. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure", said the Facebook CEO.
Although Zuckerberg stated that his company would be building upon Instagram's strengths and features, some have also questioned Facebook's genuine intentions with the US$1 billion acquisition. Would Zuckerberg and his clan eventually absorb Instagram into Facebook, like they've done before with procured competitor's apps? Will Instagram remain as an independent entity? Think Drop.io, FriendFeed, Beluga, and those that went before. As things stand, we reckon your guess is probably as good as ours.