Facebook has splashed out $US1 billion ($970 million) for popular photo-sharing app Instagram, ahead of its initial public offering (IPO) next month.
The social media behemoth has agreed to acquire Instagram for approximately $US1 billion in a combination of cash and shares. The deal is expected to be finalised before the end of June.
San Francisco-based Instagram started two years ago and allows users to take photos with their mobile devices through a variety of filters. Images are then posted to the user's Instagram page and can be shared through digital social networks. The app was released on the Android OS earlier this month.
Facebook founder and chief executive, Mark Zuckerberg, posted on his Timeline: “We believe these are different experiences that complement each other. 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.
“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.”
Instagram chief executive Kevin Systrom wrote on the official blog: “Today, we wouldn't be happier to announce that Instagram has agreed to be acquired by Facebook. It's because of our dedicated and talented team that we've gotten this far, and with the support and cross-pollination of ideas and talent at a place like Facebook, we hope to create an even more exciting future for Instagram and Facebook alike.
“It's important to be clear that Instagram is not going away. We'll be working with Facebook to evolve Instagram and build the network. We'll continue to add new features to the product and find new ways to create a better mobile photos experience.”
The move comes as Facebook's IPO is expected to be released next month. The Instagram team will join Facebook's operations.
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