Facebook buys Instagram photo sharing network for $1bn
Posted in: Miscellaneous at 10/04/2012 14:02
Facebook is paying $1bn in cash and stock for the takeover.
Instagram was only launched in October 2010 - initially just for the iPhone before being offered as an Android app last week.
Facebook's chief executive Mark Zuckerberg has pledged to continue to develop Instagram as a separate brand, allowing it to post to rival networks.
Facebook to Buy Photo-Sharing Service Instagram for $1 Billion
Instagram, an Internet start-up in San Francisco, has no revenue and about a dozen employees. It has not yet celebrated its second birthday. But to Facebook, it is already worth a billion dollars.
Facebook announced on Monday that it would pay that much in cash and stock for Instagram, the latest big winner in an industry that seems to be more awash in money by the day.
Why Facebook paid US$1bn for Instagram
The key win for Facebook here is mobile engagement. Instagram has rocketed to 30 million users in under two years. Facebook has had a mobile app for years, but it doesn't have the user love that Instagram does. By acquiring the best-of-breed mobile app -- at least, in terms of audience development -- Facebook both takes out a future competitor and grows its mobile presence.
Instagram may be a small company, but it was, until now, a threat to Facebook. While the social network has become the largest photo-sharing site -- with about 250 million photos uploaded per day -- it could not rest on its social user base to keep growing this position. Apps like Instagram, which allow sharing to Facebook as well as other services, have the potential to win over their own social network users who generate photo-sharing traffic (uploads, discussions and social gestures or "likes") exclusive of Facebook, which thrives on growing its user engagement metrics and store of data about its users.