Kevin Systrom, CEO of Instagram, announced that his company has been acquired by Facebook:
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.
Mark Zuckerberg confirmed the news on his Facebook timeline:
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.
So how much did Facebook pay for Instagram?
The social networking giant has reached an agreement to buy Instagram for $1 billion in cash and stock.
$1 billion. BILLION. I guess that answers the question of how Instagram would earn money for their free service.
Zuckerberg notes that they will develop Instagram independently from the Facebook platform and plans to retain the core functionality. As an avid Instagram user, I am a little worried about this acquisition. Presumably, the core goal of Facebook is to add even more users and increase sharing on their platform. I have a feeling Instagram’s appeal will eventually get screwed up by an increased Facebook presence.