Facebook to Buy San Francisco-Based Instagram (13 Employees) For $1 Billion

NEW YORK (AP) — Facebook is spending $1 billion to buy the photo-sharing company Instagram.

Instagram lets people apply filters to photos they snap with their mobile devices and share them with friends and strangers. Some of the filters make the photos look as if they've been taken in the 1970s or on Polaroid cameras.

``This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users,'' CEO Mark Zuckerberg wrote on his Facebook page. ``We don't plan on doing many more
of these, if any at all.''

Facebook said it plans to keep Instagram running independently. That's a departure from its tendency to buy small startups and integrate the technology or shut them down altogether just so it can hire talented engineers and developers.

``We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience,'' Zuckerberg wrote. ``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.''

Facebook is paying cash and stock for San Francisco-based Instagram and hiring its roughly 10 employees. The deal is expected to close by the end of June.

Menlo Park, Calif.-based Facebook is expected to complete its initial public offering of stock next month. Getting Instagram is big win for Facebook as it works to harness people's growing obsession with their mobile devices and sharing every moment of their life.

Instagram was only available Apple devices until recently. An app for Android devices was released last week.

It's Facebook's largest acquisition to date.

Instagram lets people apply filters to photos they snap with their mobile devices. Some of these make the photos look as if they've been taken in the 1970s or on Polaroid cameras.

Facebook says it will keep Instagram running independently. Users will still be able to run it on rival social networks such as Twitter. That's a departure from Facebook's tendency to buy small startups and integrate the technology — or shut it down altogether.

The payment will be in cash and Facebook stock. Facebook is expected to complete its initial public offering of stock next month. The deal is expected to close by the end of June.

More from the San Jose Mercury News and NY Times.

Update: Wow, Instagram has just 13 employees, Kara Swisher reports. Her take...

Photos are critically important for Facebook, which has been slow to innovate in the fast-growing mobile arena in the important consumer space. By contrast, Instagram has taken the arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Consumers have responded (including me — it is the only non-communications app I use many times a day). The San Francisco-based company — with only 13 employees — had 30 million Apple iPhone users before it came to Google’s Android last week, where it got more than a million new users in just 12 hours.

Still, despite all the usage, Instagram still had not articulated a plan for, you know, making money. Now, that will presumably be Facebook’s problem to solve. Full post