Facebook Plans to Acquire Instagram for $1 Billion

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ADOTAS – Well, here’s a little match made in someone’s version of  e-heaven: Facebook announced today it would be acquiring mobile-forward photo sharing platform Instagram, for reportedly roughly $1 billion in cash and shares. The network issued a press release about the pending acquisition, while Facebook CEO Mark Zuckerberg and Instagram CEO Kevin Systrom (pictured) each confirmed it on his respective blog (here’s Zuck’s and Systrom’s). According to Zuckerberg’s post, Instagram’s team will be joining Facebook’s wholesale. Facebook’s announcement suggested the deal would close later this quarter.

Instagram has had a banner week or so. Already boasting 30 million iPhone users, the photo app launched an Android version this past Tuesday and, according to a blog post by co-founder Mike Krieger, it went on to add 1 million new users in a 12-hour span.  And earlier today, hours before the news hit that it had agreed to sell, Instagram confirmed reports that it had secured $50 million in funding, following a Series B round led up by Sequoia, with Thrive Capital, Greylock and Benchmark all weighing in.

If statements from both Zuckerberg and Systrom are to be believed (and if they remain consistent over the coming months), Instagram will not be consumed whole by Facebook, but instead will continue to operate as something like a technologically autonomous entity under Facebook’s tent, while the Instagram team will also aid the photo functionality that’s integrated directly into Facebook. “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 friends on Facebook,” Zuckerberg wrote. “We will try to learn from Instagram’s experience to build similar features into our other products.” Systrom echoed that sentiment: “You’ll still be able to share to other social networks,” he wrote. “And you’ll still have all the other features that make the app so fun and unique.” So, in other words, they’re promising Instagram’s millions of users they’ll be able to color-correct their smartphone photos on whatever platforms their hearts desire — which may quell fears that the app may go the way of social check-in service Gowalla, which ended up shutting down, with its functions folded into Facebook’s technology for integrating location information into shared content.

This isn’t the first time Zuckerberg’s team has courted Systrom’s. The New York Times reported that Facebook made moves toward buying Instagram last summer, and Fast Company reported the two now-CEOs shared Stanford broments years ago, when Zuck invited Systrom to come by the Facebook headquarters to help out in “working on some photo stuff.” Now, with Facebook cited as being the most popular photo-sharing site in the world, it might be difficult to see how the network perceives Instagram as a threat worth buying up. But GigaOm‘s Om Malik commented on the acquisition earlier today, arguing Instagram’s strength is one of Facebook’s blind spots. Instagram is “growing like mad on mobile,” Malik wrote, “and Facebook’s mobile platform (including its app) is mediocre at best. Why? Facebook is not a mobile-first company and they don’t think from the mobile-first perspective.” Whether the degree to which Facebook might feel explicitly threatened by Instagram is questionable — Facebook, as a social network, possesses millions more users, broader functionality and richer social data — the network’s desire to cover all its bases as it trundles toward an IPO might have something to do with why it agreed to buy Instagram for double what the photo-sharing site is rumored to be worth.

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