At the price of roughly $1 billion in cash and stock, Facebook acquired social media rival Instagram Monday.
Facebook plans to keep Instagram as a standalone app but will work to improve ties between the two. The transaction will finalize later this quarter after the necessary paperwork.
With 27 million users on iOS and a wave of a million new users within the first 24 hours of launch on Android devices, Instagram was creating a name for itself in social media. Both Google and Facebook had approached Instagram in the past year with no luck in acquiring the company. Facebook was able to make an offer that suited Instagram leading to Monday’s acquisition announcement.
As a small company with only a handful of employees, Instagram will gain resources and access to Facebook’s vast engineering and design teams. Facebook CEO Mark Zuckerberg expressed his joy over the acquisition. “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,” along with helping Instagram grow by offering “Facebook’s strong engineering team and infrastructure.”
Experts expect that Facebook will integrate features into the mobile photo app such as tagging friends, checking in with geo-locator function already used in Instagram and more. Zuckerberg made a point to announce that they “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.”
With cases of users already crying out in concern, the promise is a hopeful sign to those who wish the company remain as it is.
Instagram CEO Kevin Systrom was quick to inform users that, “it’s important to be clear that Instagram is not going away,” and that he would continue to run the company “independently.” Zuckerberg commented saying, “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.”
Zuckerberg has many experts baffled as to his decision to keep Instagram as a separate mobile app. With a history of tying everything back into Facebook as a single entity, his decision to keep distance has many relating the acquisition to what Google has previously done when they acquired YouTube.
Unaware of the negotiations going on with Facebook, investors literally doubled their money overnight after Instagram closed a $500 million Series B investment round.
Previous funding came a little over a year prior when Instagram raised $7 million from investors including Twitter CEO Jack Dorsey.