This is crazy – Facebook acquires Instagram for $1B

This morning, Facebook acquired the little start-up Instagram for $1B. What does Instagarm do if you have not heard about it? This is what the website says – Snap a picture, choose a filter to transform its look and feel, then post to Instagram. Share to Facebook, Twitter, and Tumblr too – it’s as easy as pie. It’s photo sharing, reinvented. In other words, it’s a fastbeautiful and fun way to share your photos with friends and family. Users also can comment on photos and “like” them. Some people describe the app as a visual version of Twitter, where it is heavily used to share photos.

But one billion dollars? Only last week, Instagram closed a round of funding ($50m) at a valuation of $500M. So the investors just doubled their stake! This is very very rare, that the executives were raising money while the acquisition talks were going on.

This is what the Wall Street Journal said:  The deal presents a quick bonanza for the startup, which was founded in the fall of 2010 by two Stanford University graduates and has just over a dozen employees. The company’s software, which is free and until recently only available on the iPhone, allows users to touch up and share photos with followers on Instagram or other social networks, such as Facebook.

Instagram is one of a cohort of young startups that have built products around smartphones and have registered incredibly fast growth in a short period of time. On March 11, Instagram founder and CEO Kevin Systrom gave a keynote talk at the South by Southwest conference in Austin, where he announced that the company’s iPhone app had nearly doubled its number of registered users since December, going from 15 million users to 27 million users.

I guess that is the secret these days – how fast can you grow your user base? Last week, it launched its application on Android and quickly added more users. Now it claims 30m registered users.

I am not sure if there is any monetization (like revenue) yet. But the new world values eyeballs more than dollars. This is also interesting when Facebook is couple of months away from its much-touted IPO, where it aims to raise $10B at a valuation of $100B. Wow. Good for the Stanford kids who founded Instagram and the investors. It’s Disneyland come true.



2 responses to “This is crazy – Facebook acquires Instagram for $1B

  1. Instagram is popular only on “Mobile” and Facebook is not so popular as Instagram. Makes sense if FB tries to add lot of FB features with Instagram

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