Facebook acquires Instagram

Facebook has acquired photo sharing app Instagram for $1bn (£630m) in cash and stock – the social network’s largest ever investment.


The move is likely to give Facebook greater ability to monetise its mobile offer, an arm of the business which it has yet to generate “any meaningful revenue” from, according to the social network’s IPO filing.

Instagram launched in October 2010 as a free iPhone app and offered an Android version last week, which attracted thousands of new users signing up at a rate of more than 2,000 people a minute. The company says it currently has more than 30 million users, who upload more than 5 million pictures every day.

Facebook’s vice president of business and marketing partnerships told marketers at an event in London last week that images posted by brands tend to get twice the engagement rates of text posts – another reason why having a strong photo offer is critical to the company’s future revenues.

Mark Zuckerberg, Facebook’s founder and chief executive, says on his Facebook Page that the acquisition is “an important milestone” for the company because it is the first time it has acquired a product and company with so many users – although it does not plan on making further purchases of other sites.

He adds: “We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.”

Facebook will keep Instagram’s original features, such as the ability to post to other social networks such as Twitter or share photos just with the Instagram community.
In 2005 Yahoo! acquired image hosting site Flickr from Ludicorp. The site now claims to have 51 million members and 80 million unique visitors.