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Facebook buys Instagram for $1 billion.

Ace April 12, 2012 0

The guys at Instagram are really enjoying life right now as they sold their mobile sharing app, Instagram, as well as their entire team of 13 people to Facebook for awesome price of $1 billion dollars.

First lets start off with a crash course on Instagram’s history. The San Francisco-based company was founded in 2010 by Stanford graduates Kevin Systrom and Mike Krieger. The entire venture had been privately funded and the company was estimated to be valued at $500 million. Just a reminder, that’s half of what Facebook paid. Sadly, the main concern of most Instagram users is what does Facebook plan on doing to the app and it better not ruin it.

Instagram started off limited to only be used with the Apple iOS however the company released an Android version last week. If you’re not familiar with the Instagram application you really have nothing to worry about. It’s very simple and straightforward. Instagram allows you to take snapshots with your phone and then apply visual filters that make the image look cooler. The affects are usually weathered, yellowed, beat up, washed out and generally a little rugged.

The app that lets you share those photos with your Instagram followers (friends) as well as other people on Twitter, Facebook and other social networks.Along the way the app became so popular that the company has about 30 million users and after it was released for Android it picked up another 5 million users in less than a week. Thats just nutty!
However before Instagram could gain some momentum, Facebook founder Mark Zuckerberg surprised the world when he announced that his company was acquiring the startup in full for $1 billion. It’s the big talk right now for Silicon Valley because a company the size of Instagram in not likely to be purchased so quickly nor for so much money. Especially when a company like Instagram generates no revenue..
So far Facebook has a  dull history of acquiring things for their benefit. Along the way, Facebook has picked up the social streaming service FriendFeed, which it let die on the vine, and Foursquare competitor Gowalla, which it shut down. Facebook has also certainly pulled many talented engineers from their other jobs. Yet an investment like what they did with Instagram is still pretty random.
In his post on Facebook, Zuckerberg even said that this wouldn’t be a trend for the company, saying: “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.”
Regardless, the service is going to become a part of Facebook now. Zuckerberg along with the Instagram founders say they plan to keep the standalone application available and will continue to allow it to connect with other social networks. So don’t be surprised if you see some of the Instagram style spread to photos on facebook.

Also we can’t forget Facebook’s most visible new addition is a giant Photo. The new Timeline feature Facebook offers is primarily concerned with nostalgia and how we interact with and view past events. A large photo on the cover and a layout in which photos a larger and in timeline order creates an artificial sense of nostalgia where a user is consistently reminiscing as he/she scrolls down the page.

However one thing is for sure; Facebooks acquisition of Instagram probably won’t represent a trend in Silicon Valley but companies selling for double their value does show you that there is money to be made in this new industry. An industry win which here a good idea and good execution can make you a very, very rich person.

It really doesn’t get any cooler than that.


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