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Billion-Dollar Baby: Instagram Acquired by Facebook

First the introduction of Timeline, then the announcement of an IPO, and now, Facebook is acquiring another startup.  On Apr. 9, 2012, in a post on his Facebook page, company co-founder and CEO Mark Zuckerberg announced that Facebook would acquire Instagram, a photo-sharing app company, for $1 billion. This acquisition is Facebook’s largest to date. An acquisition of this kind – acquiring a company and product with such a large number of users — wouldn’t happen again any time soon, if at all, said Zuckerberg.

The acquisition of Instagram is meant to make mobile users’ photo sharing experiences on Facebook as easy and enjoyable as it is for computer users.  Popular from the moment in launched in 2010, Instagram won top app honors from Apple in 2011.

Naturally, many of the 30 million people who use Instagram started voicing their concerns the minute the news broke Apr. 9 on Twitter. Will the service be diminished now that it’s a part of Facebook? According to Zuckerberg, the answer to that question is no.

“We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your [Facebook friends],” said Zuckerberg in his post.

Instagram co-founder and CEO Kevin Systrom concurred in a post on Instagram’s blog. “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,” said Systrom.

Time will tell whether Instagram will be able to remain an independent arm of the Facebook body or be raided for its talent while its services get shuttered, as Hayley Tsukayama put it.  According to Tsukayama, this is the fate that befell previous Facebook acquisitions, Gowalla, Beluga and Hot Potato.


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