Facebook Acquires Instagram For $1B
Social media giant Facebook has just acquired Instagram, a booming photo sharing app for iPhone users that also has released the Android version last week. The acquisition is valued at $1 billion combining cash and stock. This is reportedly the biggest acquisition for Facebook and CEO Mark Zuckerberg that the announcement on Monday has made it to news headlines.
Instagram was established in 2010 by Kevin Systrom and Mike Krieger with just a few people. The app allows users share photos with unique effects on their iOS smartphones. When the Android version was launched last week, more than a million users downloaded the app in less than half a day.
While in most cases acquisitions are dissolved after redeploying their existing staff, Zuckerberg clarified that Instagram will continue to operate independently. “We’re committed to building and growing Instagram independently,” the CEO said. “Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.”
Instagram is currently free of charge and has no business model. This can change sooner or later as it gains critical mass in its user base. Facebook may have spent a huge chunk of its resources to acquire Instagram but it complements their existing service offering that they could very well be further expanding their reach.