updated 08:15 pm EDT, Thu April 12, 2012
Facebook CEO personally involved in Instagram deal
Facebook's $1 billion buyout of Instagram was a rapid attempt to land the mobile app developer before it got much bigger, insiders uncovered. Within a day of Instagram's getting a $50 million venture capitalist funding round last Thursday, putting its value at $500 million, Facebook founder Mark Zuckerberg had called Instagram co-creator Kevin Systrom and made his offer known, the New York Times heard. It took just the weekend to resolve differences and finalize the deal for twice the photo app writer's value.
Zuckerberg had reportedly talked to Systrom in the past, but the combination of the financing and the Android port were likely deciding points.
The speed was partly made possible by Zuckerberg's majority voting power, which in Class B shares equates to over 57 percent. His influence makes it near certain that many of his suggested plans will go through short of a change or heart or a deliberate abstention from the voting process.
As detailed at the time, the acquisition is meant to improve Facebook's influence in mobile photos. Members can upload photos directly to Facebook today, but the lack of community and special features has made it relatively lackluster. Some speculation has existed that Zuckerberg bought Instagram to keep it from a purchase by Google or Twitter, either of whom would have a ready-made photo sharing method that could link to the service.
Unlike earlier deals, the newcomer isn't being absorbed into Facebook's services. Instead, it will remain an independent app, and Facebook has made the unusual pledge that users won't need to have a Facebook account to use the title. Zuckerberg added that the acquisition was likely the last of its type. Most earlier deals were to get employee talent more than any actual products.