Facebook in yet another expansion pays Instagram a photo sharing social site $1 Billion. The founder of Instagram Kevin Systrom is said to be over the moon and posted on Facebook “I’m psyched for the next chapter of this long journey."
This latest Facebook deal was actually made just before Facebook went public and the down payment required to clinch the deal was about a quarter of the cash-on-hand that Facebook had as of the end of 2011. Kevin Systrom founder of Instagram must have been happy as his photo sharing social site has often been described as a company characterized as having, “lots of buzz but no business model”. The Owner of Facebook Mark Zuckerberg has promised that he will be committed to building and growing Instagram independently of Facebook and not as “CNN Money” put it, ” buying a company having a hot startup, then killing their products, and redeploying their staff on other projects. We will see. Kevin Systrom is said to have made about $400 million based on his ownership stake in the business so it is no wonder that he is happy
Kevin Systrom Instgram
Since Facebook went public and seeing there share price dramatically fall from $38.00 it was not sure if the deal was going to take place, but on the 14th August, 2012 the Office of Fair Trading who were investigating the deal gave the deal the Green light, allowing the Federal Trade Commission to allow the deal to go through on the 22nd August 2012.
I think we all know who this is
Instagram has grow quickly, in December 2010 they had just over one million registered users but by April 2012 they had over 30 million accounts set up on there systems. and with over 150 million uploaded photographs in there system there is plenty of things Facebook can play around with. Not bad for a company with just 13 employees who Facebook has promised to keep on, again we will see.
This has proven to be an expensive buy for Facebook if you compare it with the $35 million Yahoo! paid for Flickr in 2005, especially when this website has since become among the 50 most popular websites in the world today. It is hoped that Facebook will continue with the same strict codes that Instagram has had with its own subscribers. For instance all Instagram users must be of at least 13 years of age, no nude or partially nude, or sexually suggestive photos and they demand that all members are responsible for all activity conducted on the site. Another item Instagram would like to see stay in place is that Instagram never holds or has ever held the copyright to any photographs on there site, again we will see.
In closing if you are a member of Instagram you will probably find yourself (if you are not already) a member of the “Facebook Social Site” quite soon.
Credits: Idea from a news story on the BBC, dates from Wikipedia.