Facebook Buys Instagram Ahead of IPO
Monday tech headlines didn’t pass without spending a page or two about the much celebrated acquisition of photo-sharing app Instagram by social networking giant Facebook for a whooping $1 billion.
“I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook,” Mark Zuckerberg, Facebook CEO, said.
The move came on the heels of the recent debut of Instagram on Android platform, and just a month before Facebook’s reported Initial Public Offering (IPO). And there seems to be no stopping to the awaited move by Facebook to launch an IPO despite a report by accounting firm Ernst & Young that global IPO activity has fallen sharply in Q1 2012.
So far last quarter, a total of 157 deals has raised only US$14.3b, down by 69% by capital raised (US$46.6b in 296 deals), compared to the same period last year. This is the lowest quarter on record since Q2 2009 when there were 82 IPOs worth US$10.4b.
Sources say the deal will close later this quarter.
Instagram CEO Kevin Systrom, however, promised that the photo-sharing app will stay after all. Much of the app’s features will retain, according to Facebook.
Zuckerberg added: “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.
“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.”