“Using Instagram for free isn’t cool. You know what’s cool? Paying a billion dollars for it.” -Mark Zuckerberg
Article from http://venturebeat.com by Jennifer Van Grove:
The billion-dollar deal that shook the web took just 48 hours from start to finish, according to inside sources.
Monday, Facebook announced that it was acquiring photo-sharing phenom Instagram for $1 billion in cash and stock. The deal, reports the New York Times, was championed by none other than power-player CEO Mark Zuckerberg, and pieced together in record time.
“Less than 24 hours after the ink dried on Instagram’s latest financing round — an investment that valued it at roughly $500 million — Mr. Zuckerberg placed a call to Kevin Systrom, Instagram’s chief executive,” the Times reports.
The story goes that Zuckerberg, Systrom, and their respective companies spent this past weekend ironing out the details before going live with the news Monday morning.
Facebook for its part won’t confirm the insiders’ accounts, but the details match up with an earlier report from Fortune. Sources told the publication that the Facebook-Instagram deal was started only after the beloved photo-sharing startup secured a (still rumored) $50 million round from Seqouia, Thrive, Greylock, and Benchmark.
“I think Facebook panicked,” a person told Fortune. “So it decided to take out the competition before it had a chance to grow even bigger.”
VentureBeat’s friends in the financial community agree. “Facebook’s short-term threat, which could eat into their IPO valuation, was Instagram,” Moor Insights and Strategy president and principal analyst Patrick Moorhead told us when the news broke. “They removed that problem.”
For more background on why Facebook was so desperate to snatch up Instagram at such a high price, just have a look at its S-1.
FACEBOOK – MARK ZUCKERBERG announcement:
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.
We believe these are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook.
That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.
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.
These and many other features are important parts of the Instagram experience and we understand that. 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.
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. 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.
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.
Vid is voiced-over and edited by Dashiell Driscoll, Andy Maxwell, and Funny Or Die http://funnyordie.com
Motion picture courtesy of Sony Pictures.
Duration : 0:1:41
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