Mark Zuckerberg of Facebook Inc, the world’s biggest social-networking service, posted to his Timeline that Facebook has just concluded a deal to acquire mobile photo sharing app Instagram for approximately $1 billion in cash and stock. The transaction should Instagram grew from 1 million users in January 2011 to 15 million in December 2011. It has 30 million users now. Instagram was increasingly positioning itself as a social network in its own right not just a photo-sharing app.
Instagram will gain massive design and engineering resources by joining forces with Zuckerberg, Still, the deal to stay standalone will allow Instagram to maintain some of its company culture.
Google and Facebook have engaged in negotiation with Instagram several times over the past 2years. With the release of Instagram for Android were it had well over 1 million downloads in the first 24 hours, For Google or Facebook competing for Instagram, they must have relised that it could be a though battle. So Facebook was going to have to sweeten its offer over the last valuation for Kevin Systrom and the board to take the offer seriously.
Keeping Instagram as a standalone product and brand is in following of Google stratgy with keeping YouTube and Android as separate following their aquisition. This is a really change of strategy from the way Zuckerberg has historically run Facebook as a single product.
Instagram’s investors must be thrilled with the deal.
About Facebook:
Facebook is the world’s largest social network, with over 500 million users. Facebook was founded by Mark Zuckerberg in February 2004, initially as an exclusive network for Harvard students.
Mark Zuckerberg posted the following letter to his Timeline about the deal:
About Instagram:
Instagram is a free mobile-only photo-sharing application that allows users to take photos, apply a filter, and share it on the service or a variety of other social networking services, including Facebook, Twitter, Foursquare, Tumblr, Flickr , Foursquare and Posterous. What's great about it is that it is very fast especially compared to Facebook. It has 30 million users now The application is compatible with any iPhone, iPad or iPod Touch running iOS 3.1.2 or above.
Instagram CEO Kevin Systrom posted the following letter in a blog post about the deal:
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