Facebook announced its agreement to buy the popular photo sharing app maker Instagram on Monday (4/9/2012) to the tune of $1 billion (with a “B”) in cash and stock.
Facebook’s CEO and founder, Mark Zuckerberg, made the announcement in a Facebook post on Monday that has already generated tens of thousands of likes.
While pledging to allow Instagram to stay independent, Zuckerberg did talk about what the acquisition meant for Facebook:
For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.
We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.”
Since Facebook has historically targeted smaller companies for acquisition, spending not more than tens of millions of dollars at the most, the extraordinary sum of $1 billion is still resonating throughout much of Silicon Valley.
Instagram is a 2 year old San Franscisco startup that claims to have more than 30 million registered users. Instagram made the front page of tech news sites (and newspapers I suppose) last week when they added their app for Android phones to compliments its app for the iPhone. Its interesting to note that Instagram had turned down a previous offer from Facebook and that it had been rumored to be close to a new round of funding which would have valued the startup at $500 million.
So what does this mean for Facebook? In typical Facebook style, Zuckerberg did not hint at much but ended his post in saying that “providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together” and that he was “looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.”