Facebook is flashing its financial war chest as its young founder announced a very big purchase.
Mark Zuckerberg announced that Facebook has bought photo-sharing software company Instagram for $1 billion. And to make people say more “ooh” and “aah” to this deal, the social networking giant that first started in Harvard will pay Instagram in cash and Facebook stocks. This purchase is even more expensive than what New York Times is worth!
Of course, the stock value that the photo-sharing company will receive will even increase in value as Facebook’s most-awaited initial public offering (IPO) will happen next month.
The app is being used by at least 30 million users world wide including celebrities in altering and posting images using their smartphones and tablets. It is also now available in an Andriod version aside from its popular Apple app version.
Instagram founders Kevin Systrom and Mike Krieger, who are both 26 years of age, instantly join the league of young and ultra rich men.
There are however comments from several technology observers that the purchase may not be all too good for Instagram.
Below is Mark Zuckerberg’s official announcement of his purchase on Facebook.
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 be…st 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.
We’ve got to wait and see then if this $1 billion purchase is worth it for Facebook.