After first trying to compete with photo filter and sharing application Instagram, social media giant Facebook this week instead plunked down a cool billion in cash and stock to buy the company.
"For years, we've focused on building the best experience for sharing photos with your friends and family." Facebook founder and CEO Mark Zuckerberg announced on his Facebook page Monday. "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."
Zuckerberg emphasized that while Instagram employees will now work for Facebook, the company will be run independently because "we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook."
Developed by Kevin Systrom and Mike Krieger, Instagram launched via Apple's App Store in October 2010, and less than a year later claimed 10 million users.
As recently as August, Facebook was working on developing its own filters to give users' photos a retro look, as Instagram does, The New York Times reported. The paper said the social media giant had also made an attempt to buy Instagram then, after it raised $7 million in a round of funding from Benchmark Capital. Reports said Monday that the San Francisco-based company had been approved for another $50 million from various investors, though the free app currently generates no income.
Monday's news fueled speculation that Facebook, on its way to an expected $100 billion initial public stock offering, viewed the fast-growing application as a potential competitor that could capture the interest of young people who may be getting bored with Facebook.
Last week, Instagram released an Android app in addition to its already successful iOS app for iPhone, giving it access to the vast majority of the U.S. smartphone market and a sizable chunk of the international market. Instagram reportedly saw 1 million downloads in its first 12 hours via Google Play (the new service that consolidates media and app sales).
News of the deal caused a social media firestorm, with Tweets using the hashtag #Instagram moving so quickly across the screen, faster than one per second at midday Eastern time, it was hard to read them. (continued...)
Posted: 2012-04-09 @ 4:47pm PT
Insane. Another overvalued tech company purchased with Monopoly money. This will just add to the drama when Facebook comes crashing down to Earth in a year or so.