Facebook buys Instagram for $1 Billion

Facebook has just finished a deal to acquire mobile photo sharing app Instagram for approximately $1 billion in cash and stock. Instagram will remain an independently branded standalone app that’s separate from Facebook, but the services will increase their ties to each other. The transaction should go through this quarter pending some standard closing procedures.

Now it seems Facebook would rather buy Instagram which comes with a built-in community of photographers and photo lovers, while simultaneously squashing a threat to its dominance in photo sharing.

At 27 million registered users on iOS alone, Instagram was increasingly positioning itself as a social network in its own right – not just a photo-sharing app. And it was clear that some users were doing more of the daily sharing activities on Instagram rather than Facebook’s all-in-one mobile apps, which had to be cluttered with nearly every feature of the desktop site.

With the Instagram for Android launch last week, Instagram was going to get to 50 million registered users in a heartbeat after racking up more than 1 million in the first 24 hours. And with that kind of momentum, Facebook felt like it had to move – fast. After all, photo sharing and tagging are arguably what made Facebook.

With the deal, Instagram will gain massive design and engineering resources by joining forces with Facebook, a big change after running as a famously lean company with just a handful of employees. Still, the deal seems to let Instagram stay somewhat independent and maintain some of its company culture. Instagram CEO Kevin Systrom writes in a blog post, “It’s important to be clear that Instagram is not going away.”

Himanshi Manna
Science & Technology, BuddyBits.com