In a press release posted by Facebook, the social media giant reported that they were able to acquire photo-sharing website Instagram for $1 billion. This news was also confirmed by the social network’s founder and CEO Mark Zuckerberg in a Facebook post:
“I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.”
Subject to a customary closing condition, the transaction is expected to close on the latter part of Q2 2012. The acquisition is likely to give Facebook higher value when the social media giant goes public later this spring.
What’s in Store for Instagram
Recently, Instagram was able to raise $50 million in a series B round led by Sequoia Capital. In turn, their valuation also increased to $500 million.
Despite Facebook’s acquisition, the photo-sharing site will continue to run under its original name. Moreover, it will continue to support posting services beyond the popular social network. That way, users can still have followers or follow other people without connecting directly on the famous social media.
Integrating Instagram Service on Facebook
Facebook generally buy companies for talent and either shut it down or incorporate its technology in their system. For example, Gowalla closed is location-based service last March following its acquisition. Meanwhile, the group messaging app Beluga became Facebook Messenger.
Last July 2011, it should be recalled that the social media giant was suspected to launch an Instagram competitor. It made a buzz after leaked images of a mobile photo-sharing app for the social network was discovered. The rumor never materialized, and it was followed by claims that Facebook is planning to buy Instagram.
Despite the social media giant’s history of acquiring brands, the case is different with the photo-sharing site. As Zuckerberg pointed out:
“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….
“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.”
The social media giant’s CEO also clarifies that this will be their last high-profile acquisition as of the moment. Other than providing the best photo-sharing experience for their users, Facebook has no future plans of acquiring big brands in order to prevent the speculation that they will also buy Pinterest.