Facebook on Monday announced it has acquired the popular photo-sharing service Instagram for about $1 billion in cash and stock.
Instagram is a barely-two-year-old company that created a photo-sharing application for smart phones and other mobile devices. According to its Web site, Instagram has more than 8 million users on the iPhone platform alone.
Facebook founder and chief executive Mark Zuckerberg posted an announcement on his own Facebook page, saying, “I'm excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook. 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.”
Instagram, which allows users to post their pictures to social media sites such as Facebook, was founded by two Stanford University graduates, Kevin Systrom and Mike Krieger.
Systrom released a statement on his company blog saying, “When Mike and I started Instagram nearly two years ago, we set out to change and improve the way the world communicates and shares. We’ve had an amazing time watching Instagram grow into a vibrant community of people from all around the globe. Today, we couldn’t be happier to announce that Instagram has agreed to be acquired by Facebook.”
Facebook said it has no plans to alter Instagram’s business model and will allow Instagram's users to continue posting their photos on social media sites other than Facebook.
“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,” Zuckerberg said in the statement.
Zuckerberg said the event marked a milestone for the social network 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," he added.
Facebook is gearing up for an initial public offering of its stock, likely in May. The social networking giant is expected to raise as much as $10 billion in the deal. It is the most highly anticipated IPO since Google’s (GOOG) debut in 2004.