Zuckerberg Buys Photo App Instagram For $1B
With Google researchers “Eye”-ing a comprehensive mobile device that includes image capture and uploading to social networks, Facebook decides to buy a mobile platform app (for Apple and Android devices) that currently enjoys 30 million users: Instagram. This app helps you edit and add filter effects to your photos and share them with friends of the same photography interests.
Instagram founders Kevin Systrom and Mike Krieger accepted Mark Zuckerberg’s offer of $1 billion in cash and shares for their photo-sharing application. Zuckerberg said Facebook was about sharing photos with friends and family all around the world — while Instagram helped people with similar photography interests to share pictures, but this acquisition would help both companies grow.
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.
Zuckerberg knew Systrom back when the Instagram CEO was still attending Stanford. When Zuckerberg founded Facebook in 2004, Systrom was playing around with the predecessor to his image uploading and sharing application called Burbn. Mark reportedly offered Kevin a job at Facebook, but Systrom declined and (unlike Zuckerberg) got a degree. Systrom founded Instagram with Mike Krieger in 2010, but ended up as Zuckerberg’s employee anyway in 2012 (to a cool estimated share of $400 million).
Instagram users and Facebook critics are hissing and ranting (some are reportedly tearing out their hair in huge clumps–kidding!), saying this will be the downfall of Instagram because Facebook just wants to break it up and absorb the talented people. But Zuckerberg emphasized the dozen or so Instagram employees will be retained and the company will have autonomy.
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.
The exponential growth and record-breaking acquisition of Instagram is a story that either warms the heart or gives you heartburn (glass half empty / half full debate), but this tactical move gives Facebook better leverage in the mobile application arena. Zuckerberg can’t say how he will make back the $1 billion investment, but he seems to be confident in making both companies work together, apart.
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.
Facebook is still flush with cash after additional investments put its estimated IPO bid at $100 billion. It is currently embroiled in several patent lawsuits and filed some of its own, which is why this Instagram deal must’ve been handled with the utmost secrecy and reams of non-disclosure agreements.