Facebook’s big spend: social media site to buy Instagram for US$1 billion
It may be a good idea to flex your photography skills and incorporate images into your social media marketing.
Just last month we posted about the rising popularity of photo sharing in a story about US president Barack Obama joining the social network Pinterest.
And now Facebook is sitting up and taking notice of the lucrative photo sharing market.
On April 9 the social media giant announced that it will acquire Instagram – a popular photography application for smartphones.
The catch? Instagram is valued at US$1 billion, making this the largest investment that Facebook has announced so far.
Using Instagram with your iPhone or Android is easy. Simply take a picture, choose a filter, post it to Instagram and then share it among your social networks, such as Facebook, Twitter and Tumblr. And like many other applications, it is also free to download.
So why is Facebook paying US$1 billion to acquire a free app that it could probably re-design itself?
According to chief executive and founder Mark Zuckerberg, the appeal of Instagram lies in its popularity. Over the past ten months, the amount of people using the app has boomed from five to 30 million users.
“This is an important milestone for Facebook 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,” Mr Zuckerberg said on April 9.
“But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together,” he added.
Unsurprisingly, news of the sale has been getting good coverage across social media – Instagram is trending on Twitter and to date, Zuckerberg’s announcement over Facebook has had 103,200 likes and 17,928 comments.
The purchase is expected to be finalised by the end of June. Instagram has approximately ten employees and according to Zuckerberg, Facebook intends to continue working closely with them.
“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.”