Facebook Instagram Deal Nets Huge ProfitsBy: Shawn Hess - April 9, 2012
Yes it’s a great acquisition for Facebook, they purchased the ever popular Instagram service for about one billion dallars. Sure it’s a huge price to pay, but it’s a valuable brand to add to Facebook’s already diverse and continually growing spectrum of social tools.
Mark Zuckerberg commented about the deal on his Facebook page:
“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,”
“But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.”
It was definitely an expensive transaction for Facebook and some people profited more than others from the acqusition. Co-founder and CEO Kevin Systrom owns 40% of Instagram and he will clear over $400 million from the deal. That’s pretty nice! There are a couple of others stakeholder who will receive sizable paydays, but an astounding $100 million will be divided up by Instagram’s 13 full-time employees by seniority.
Zuckerberg again comments on the magnitude of the deal:
“We don’t plan on doing many more of these, if any at all,”
“[We’re] committed to building and growing Instagram independently,”
“Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.”
So Facebook fans can look forward to the new service and Instagram fans can continue to use it. It seems like a very prosperous pairing for all involved. It also seems very timely with the Facebook IPO. Happy times!