Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Applications
    • Applications
    • Cloud
    • Development
    • IT Management

    Facebook Closes Devalued Instagram Acquisition

    By
    Chris Preimesberger
    -
    September 6, 2012
    Share
    Facebook
    Twitter
    Linkedin

      Five months after it announced the acquisition of photo-sharing application provider Instagram for a little more than $1 billion, Facebook closed the deal Sept. 6 for $730 million.

      Facebook in April offered $300 million in cash and 23 million shares of common stock for Instagram, making the deal worth $1.174 billion at the time. Facebook subsequently went public in May. Since then, however, the stock has dropped in value from its debut at $38 per share to $19 per share, reducing the value of the transaction to $730 million.

      At the time of the agreement, neither Facebook nor Instagram included a specification for a floating share-exchange ratio; otherwise, Instagram might have been able to earn much closer to $1 billion in the transaction.

      Two-year-old, San Francisco-based Instagram remains one of the most popular photo-sharing social-networking services. In a separate blog post Sept. 6, Instagram announced that more than 5 billion photos have been shared through its mobile apps.

      Both companies confirmed the deal in blog posts. Facebook Vice President of Engineering Mike Schroepfer and Instagram CEO and co-founder Kevin Systrom both wrote that Instagram would continue to develop and evolve its own product, despite new ownership.

      “As we said from the beginning, we are committed to building and growing Instagram independently,” Schroepfer wrote. “Instagram will continue to serve its community, and we will help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure. We also can’t wait to work with the talented Instagram team to improve the mobile experience.”

      Systrom wrote, “The Instagram app will still be the same one you know and love. You’ll still have all the same people you follow and that follow you. You’ll still be able to share to other social networks. And you’ll still have all the other features that make the app so fun and unique.”

      Instagram has about 40 million active users. Facebook CEO and co-founder Mark Zuckerberg has said that this was the first–and possibly the last time–his company would acquire a company with so many users.

      “We don’t plan on doing many more of these [acquisitions], if any at all,” he blogged at the time of the acquisition.

      Setting some minds at ease, Zuckerberg explained that Instagram users will have the option to not share Instagram photos on Facebook, and the ability to “have followers and follow people separately from your Friends on Facebook.”

      “We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience,” Zuckerberg said. “Facebook understands what’s important to the Instagram experience, and that we will try to learn from Instagram’s experience and build similar features into its programs, while also helping Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.”

      On April 6, Instagram opened its world to Android in addition to Apple iOS users. In half a day, the Android app was downloaded by more than 1 million users.

      eWEEK Senior Writer Michelle Maisto contributed to this story.

      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor Emeritus of eWEEK. In his 16 years and more than 5,000 articles at eWEEK, he distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Big Data and Analytics

      GoodData CEO Roman Stanek on Business Intelligence...

      James Maguire - May 4, 2022 0
      I spoke with Roman Stanek, CEO of GoodData, about business intelligence, data as a service, and the frustration that many executives have with data...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2021 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×