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Facebook to Acquire Instagram for 1 Billion....

Bob

Well-known member
#1
Facebook has just announced that it will acquire Instagram, the popular mobile photo-sharing service, for $1 billion in cash and shares.

The social networking giant posted on the acquisition, its biggest yet, on its site, as well as on CEO and co-founder Mark Zuckerberg’s Timeline on Facebook.

Photos are critically important for Facebook, which has been slow to innovate in the fast-growing mobile arena in the important consumer space. By contrast, Instagram has taken the arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Consumers have responded (including me — it is the only non-communications app I use many times a day). The San Francisco-based company — with only 13 employees — had 30 million Apple iPhone users before it came to Google’s Android last week, where it got more than a million new users in just 12 hours.

Still, despite all the usage, Instagram had not articulated a plan for, you know, making money. Now, that will presumably be Facebook’s problem to solve.

The Facebook acquisition has been kept very quiet, with its CEO Kevin Systrom working on it in conjunction with new fundraising efforts that would have valued the company at $500 million. Liz Gannes reported on this effort last week, which was poised to close, in fact, before the Facebook deal was struck over the weekend.

Until now, Instagram has received Series A funding of $7 million led by Benchmark Capital just over a year ago, when it only had 1.75 million registered users.

Seed investors include Andreessen Horowitz — which did not follow on later — and Baseline Ventures. Also in the Benchmark round: Twitter creator Jack Dorsey, former Facebooker Adam D’Angelo and Chris Sacca.

In a blog post titled “Instagram + Facebook,” Systrom promised no change, except for the $1 billion mountain of cash:

“It’s important to be clear that Instagram is not going away. We’ll be working with Facebook to evolve Instagram and build the network … The Instagram app will still be the same one you know and love.”

Zuckerberg also promised that Facebook would keep Instagram independent, and that such a large purchase would be rare for the company, which is set to go public soon.

“This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users,” he wrote. “We don’t plan on doing many more of these, if any at all.”

Here is the full press release from Facebook:

Facebook to Acquire Instagram

MENLO PARK, CALIF. — April 9, 2012 — Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.

Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:
I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining 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.

That’s why we’re committed to building and growing Instagram independently. 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.

We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But 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.

We’re 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.
http://allthingsd.com/20120409/breaking-facebook-to-acquire-instagram-for-1-billion/?mod=tweet
 

Carlos

Well-known member
#4
Why the sadness? This means Instagram can make better integration, better product, and Facebook can bring more market into Instagram.

This is good news for all concerned, since Facebook/Mark Zuckerberg has already said that they have no plans to change anything yet. In fact, they're giving their users the choice to detach their facebook info from the app.
 

dieketzer

Well-known member
#6
Why the sadness? This means Instagram can make better integration, better product, and Facebook can bring more market into Instagram.

This is good news for all concerned, since Facebook/Mark Zuckerberg has already said that they have no plans to change anything yet. In fact, they're giving their users the choice to detach their facebook info from the app.
thats the same kind of line i was fed by iB a few years ago. look how that turned out.
facebook will want some sort of return on their investment, whether that be ads, data, whatever. im not too happy about it.
 

DRE

Well-known member
#8
Why the sadness? This means Instagram can make better integration, better product, and Facebook can bring more market into Instagram.

This is good news for all concerned, since Facebook/Mark Zuckerberg has already said that they have no plans to change anything yet. In fact, they're giving their users the choice to detach their facebook info from the app.
As I've learned today 'better integration' means that now Instagram will install Facebook on your app for you. I tried connecting a different Facebook account but it wouldn't let me, so I had to not only remove the app from my Facebook account, I also had to uninstall the Facebook application instagram installed that runs in the background just to connect a different Facebook account to my Instagram.
 

Digital Doctor

Well-known member
#10
Picture sharing is an integral part of Instagram and Facebook.
I think Facebook saw Instagram as a potential future competitor.
I doubt it was worth 1 billion, mind you.
 

Brad L

Well-known member
#12
I've never used instagram, but from what I hear it just applies various filters to an existing photo and adds a border. $1,000,000,000
 

Digital Doctor

Well-known member
#13
I've never used instagram, but from what I hear it just applies various filters to an existing photo and adds a border. $1,000,000,000
Instagram: How many users does Instagram have?

Oct 13 2010: 100,000 (via Kevin Systrom's top answer)
Oct 20 2010: 200,000 (http://bits.blogs.nytimes.com/20...)
Oct 28 2010: 300,000 (via Mike Krieger on net@night)
Dec 21 2010: 1 million (http://bits.blogs.nytimes.com/20...)
Feb 01 2011: 1.75 million (http://content.usatoday.com/comm...)
Feb 15 2011: 2 million (http://techcrunch.com/2011/02/14...)
May 03 2011: 3.6 million
May 26 2011: 4.4 million
Oct 31 2011: 12 million
Dec 5 2011: 14 million
Jan 24 2012: 15 million (http://thenextweb.com/apps/2011/...)
Mar 11 2012: 27 million (http://www.cnn.com/2012/03/11/te...)
May 1 2012: 50 million (http://www.zdnet.com/blog/facebo...)
July 26 2012: 80 million (http://blog.instagram.com/post/2...)
Sep 11 2012: 100 million (http://mashable.com/2012/09/11/i...)

They got 1 billion because of their rapid growth.

Instagram is great.
 

Forsaken

Well-known member
#15
I've never used instagram, but from what I hear it just applies various filters to an existing photo and adds a border. $1,000,000,000
Remember all the myspace profiles by teenage girls with antiqued photos, or with filters applied to them? That's Instagram.

Also a wannabe photographer community it seems like.
 

Adam Howard

Well-known member
#17
I'm not surprised about National Geographic's responce.

The new terms "just about" (debatable) says all photos become the property of Instagram (Facebook) and may be re-used and distributed.

Part of the new ad policy also suggest no photos with copywritten logos or watermarks (something National Geographic does). They basically don't want any "outside" advertizement (or anything preventing them from re-using and distributing the photos they now own).

At least this is how I personally "understood" the policy change.
 

SneakyDave

Well-known member
#18
NatGeo does the same thing though with its contests...

http://www.nationalgeographic.com/nikon/


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D.O.A.

Well-known member
#19
Hmm I guess blowing 1 bllion on a photo app and trying to look like a good investment means squeezing every cent out of suckers from now on.

facebook exec; "yo zynga, buddy, pal... you make such cool games.... oh btw bro our processing rates have gone up to sell your digital sh*t. Your next bill will reflect this"