In its biggest acquisition to this day, the social network has bought Instagram, the preferred photo-sharing application, for about $1 billion in cash and stock, the firm said Monday.
It's a remarkable move for Facebook, which has exclusively focused on bite-size procurements, worth less than $100 million.
With Instagram, Facebook will get a powerful mobile gamer-- an area that is seen as a fancy the sprawling social media. Founded two years ago, the solution-- which lets users share pictures and also use elegant filters-- has actually become one of one of the most downloaded applications on the iPhone, with some 30 million users. Instagram launched a variation of its application for Google's Android operating system recently.
The Owner Of Instagram
On Monday, both firms revealed their dedication to run Instagram as an independent solution.
In a post on his account page, Facebook's primary Mark Zuckerberg stated Instagram would continuously collaborate with competing social networks. That will permit individuals to publish on various other services, comply with individuals outside of Facebook, and also to pull out of sharing on Facebook.
" For many years, we have actually focused on constructing the most effective experience for sharing pictures with your loved ones," Mr. Zuckerberg wrote. "Now, we'll have the ability to work even more very closely with the Instagram team to additionally offer the most effective experiences for sharing gorgeous mobile pictures with individuals based on your passions."
In a separate article on Instagram's Web site, the business's chief executive, Kevin Systrom, additionally stated plans to protect the service's capability and stated he eagerly anticipated leveraging the new moms and dad firm's resources and also ability.
The announcement comes as Facebook gets ready for its highly anticipated initial public offering, commonly anticipated to take place next month.
Though Facebook is known for smaller procurements, Instagram's rising momentum most likely compelled the social network to promptly put together a billion-dollar deal. Recently, Instagram, which has simply a handful of employees, shut a funding round worth more than $50 million with a number of famous investors, including Sequoia Capital, a very early backer of Google, Thrive Resources, the company run by Joshua Kushner, and also Greylock Capital, a very early investor of LinkedIn. AllThingsD initially reported last week that Sequoia remained in the process of leading a $50 million round in Instagram.
That most recent financing round valued Instagram at around $500 million, according to a single person with knowledge of the issue, that asked for anonymity since discussions were private. Facebook's purchase, one week later on, suggests that investment has actually currently increased in value.
The offer is expected to close later this quarter, according to Facebook's statement.
Here is the press release from Facebook:
" Facebook introduced today that it has reached an agreement to get Instagram, an enjoyable, preferred photo-sharing app for mobile phones.
" The complete factor to consider for San Francisco-based Instagram is approximately $1 billion in a combination of money as well as shares of Facebook. The deal, which goes through customary closing conditions, is expected to close later on this quarter."
Mark Zuckerberg, founder and also chief executive of Facebook, uploaded about the transaction on his Facebook page:
" I'm excited to share the news that we have actually accepted obtain Instagram and that their talented team will certainly be joining Facebook.
" For years, we've concentrated on building the very best experience for sharing photos with your loved ones. Currently, we'll be able to function much more carefully with the Instagram group to also supply the best experiences for sharing gorgeous mobile photos with individuals based upon your passions.
" Our team believe these are different experiences that complement each other. However in order to do this well, we need to be conscious about maintaining and also building on Instagram's toughness as well as features instead of just aiming to integrate whatever into Facebook.
" That's why we're committed to building and expanding Instagram individually. Numerous individuals all over the world like the Instagram application and the brand name connected with it, and our goal is to help spread this app and brand to a lot more individuals.
" We believe that Instagram is connected to other services past Facebook is an important part of the experience. We plan on maintaining attributes like the capability to post to various other socials media, the capability to not share your Instagrams on Facebook if you want, as well as the capability to have fans as well as adhere to people separately from your buddies on Facebook.
" These and lots of other functions are essential parts of the Instagram experience as well as we comprehend that. We will certainly attempt to learn from Instagram's experience to construct comparable features into our other items. At the same time, we will aim to aid Instagram continuously grow by using Facebook's solid engineering team and infrastructure.
" This is a crucial milestone for Facebook since it's the very first time we've ever before obtained a product and firm with a lot of users. We don't plan on doing a lot more of these, if any whatsoever. But giving the most effective picture sharing experience is one reason why a lot of individuals enjoy Facebook and we understood it would deserve bringing these 2 firms together.
" We're looking forward to collaborating with the Instagram team as well as to all of the excellent new experiences we're mosting likely to have the ability to develop with each other."