Facebook buys Instagram
Get flash to fully experience Pearltrees
When Mike and I started Instagram nearly two years ago, we set out to change and improve the way the world communicates and shares. We’ve had an amazing time watching Instagram grow into a vibrant community of people from all around the globe. Today, we couldn’t be happier to announce that Instagram has agreed to be acquired by Facebook. Every day that passes, we see more experiences being shared through Instagram in ways that we never thought possible. It’s because of our dedicated and talented team that we’ve gotten this far, and with the support and cross-pollination of ideas and talent at a place like Facebook, we hope to create an even more exciting future for Instagram and Facebook alike. It’s important to be clear that Instagram is not going away.
Mark Zuckerberg announced this morning that Facebook has "agreed to acquire" Instagram for a cool $1 billion . The tiny team that took over the mobile world will now work at Facebook. Instagram launched on Android last week, much to the chagrin of many special-snowflake iPhone users, and this news is sure to bum them out even further. But Facebook rules photos, and Instagram is the new camera . This deal makes perfect sense. Facebook reportedly failed to cut a deal for Instagram last year, and then it began working on Instagram-like photo filters of its own.
You might have heard by now that Facebook has acquired Instagram for nearly a billion dollars in cash and stock . Incredible, isn’t it? I have received text messages of awe and shock from many people in the Valley, for no one saw this coming. A few days ago it was rumored to be valued at $500 million.
Why Facebook is buying Instagram. Last week, mobile photo-sharing site Instagram raised $50 million from venture capitalists at a $500 million valuation. Today, the company agreed to be acquired for $1 billion by Facebook. So what happened in the intervening days? For starters, the venture capital round had been in the works for more than a month.
Even now, it’s still shocking how the remarkably low distribution costs of the web can change a founder’s fate overnight. Many startups are duds, and most grow at a clip that’s just not fast enough to justify an interesting valuation. But once in awhile, a company comes along and just nails it. The right timing. The right market. The right place.
Instagram ‘s CEO, Kevin Systrom, will go down in history as one of the greatest Silicon Valley success stories of our generation. Unlike Mark Zuckerberg, the man responsible for acquiring the popular photo sharing app for $1 billion, Systrom received no formal engineering training. Systrom, an active user on Quora, is a largely self-taught programmer. While working in the marketing department at Nextstop , which Facebook acquired in 2010, he would spend his evenings learning to program.
It might have been just a regular Monday for most people, but the Silicon Valley/social-media sphere was rocked by a major bombshell: Facebook co-founder and CEO Mark Zuckerberg announced in a blog post that the giant social network is acquiring the popular mobile photo-sharing app Instagram for $1-billion in cash and stock. Om has written about why the purchase makes sense for Facebook , but some observers have argued that the dollar value of the deal seems almost unbelievably high — especially for a startup with no revenues and only a dozen employees. Is the acquisition another sign of an emerging tech bubble, or just a smart move by Facebook to lock up a potential competitor? According to some estimates, the purchase price for Instagram works out to a massive $100 million per employee, which Naval Ravikant of AngelList argued should convince more startups to focus on their service rather than increasing their head-count.
<img class="size-full wp-image-49305" title="a0713dfa6afe11e1a87612313804ec91_7" src="http://www.wired.com/images_blogs/business/2012/04/a0713dfa6afe11e1a87612313804ec91_7.jpg" alt="" width="612" height="612" /> Instagram’s billion-dollar sale to Facebook raised eyebrows Monday, renewing cries of a new tech bubble. But relative to other major acquisitions, turns out it’s a pretty good deal and not the least bit inflationary.
The very surprising announcement this morning that Facebook is acquiring Instagram for $1 billion says a lot about the state of the web startup ecosystem and the tech world at large — and no doubt, a large part of the industry (and the blogs that breathlessly cover it) will be analyzing what it all means for a while. But for a big part of the financial sector, the deal signals one thing: Facebook has officially made its debut as a major buy-side player when it comes to mergers and acquisitions. Not surprisingly, Mark Zuckerberg is already trying to defuse this perception (he is a busy guy already, and sell-side M&A folks can be a pushy bunch when they see a company that’s ready to buy.) In his blog post announcing the Instagram buy, Zuckerberg acknowledges that the acquisition is a huge deal, but quickly says that it’s not necessarily the start of a shopping spree:
Facebook and Instagram have been working together for weeks on an Open Graph integration for the mobile photo sharing app, Inside Facebook has discovered. Facebook, which announced today that it acquired Instagram for $1 billion in cash and Facebook stock, has helped Instagram roll out a Timeline application to groups of users in stages without any friction on the user side. Open Graph lets applications create “actions” that can be published automatically to Facebook. These apps compile user activity over time and share summaries of that activity on Timeline.
It’s probably an understatement to say a lot of digital ink has been spilled about Facebook’s $1-billion acquisition of Instagram, a deal that sent shock waves through the startup community , the venture-capital industry and the technology sector like a boulder dropped into a swimming pool. Many people are questioning the value of Instagram — something that appears to be just a childishly simple simple photo-sharing app — and have ascribed all kinds of motives to Facebook’s interest in it. But as Om has noted in his own posts on the acquisition , there is a lot more to Instagram than meets the eye, and the biggest lesson that I think needs to be learned is: Nothing is more important than the network. A lot of the coverage of Instagram, especially from people who don’t seem to have ever used the app, has focused on the filters that are provided for users, some of which add a 70′s-style look or an old-fashioned border or a sepia tone to a photo before it is posted.
Not everyone is happy about Facebook’s acquisition of Instagram this morning , it seems. In an apparent insta-backlash , a bunch of folks are tweeting about their intentions to delete their Instagram accounts now that Facebook has tainted their trendy social network with its massive data-grabbing paws. It’s a spectacle even worse than when Instagram launched on Android, prompting all those #teamiPhone tweets. Sigh . Some tech blogs are even posting tips and tools that help you get your data out of the service, too, like Instaport , for example.
I guess all of the hue and cry about quitting Instagram over its acquisition by Facebook turned out to be a bunch of hot air, because it hasn’t stopped people from downloading the app. Instagram announced via its Twitter account that it has reached the top slot in free apps. But that doesn’t mean that everyone is happy, the replies to Instagram’s Tweet are a mixed bag at best. But it does go to show you that, as much complaining as we hear in the echo chamber of tech blogs and Twitter, Facebook and Instagram have bigger fish to fry. There are millions of people out there who haven’t tried out Instagram yet and are being exposed to it by the recent news or word of mouth. It’s about to get a whole lot bigger than just 30 million or so measly users.