Facebook And Instagram Finally Get The Go-ahead To Make It Official
Michael Harper for redOrbit.com – Your Universe Online
The Love Story which blossomed earlier this spring has finally come to a beautiful, romantic end (or is it beginning?)
The Facebook-Instagram deal has now been cleared by the parental figurehead of the US Federal Trade Commission (FTC). With an unanimous vote, the FTC has given Facebook the go-ahead nod to take on Instagram as its own and love it as it should love itself. It’s enough to make you sort of misty, isn’t it?
The FTC offered no objection and took no action against this proposal. Now, Facebook is clear to finally “seal the deal” as it were and make this thing official, according to Reuters.
Initially, Facebook agreed to purchase Instagram for the story-making $1 billion, making this acquisition the biggest in Facebook’s relatively short history. This $1 Billion was split up in cash and stock; $300 million in cash and nearly 23 million shares of FB stock.
With shares of FB performing as poorly as they have been, Instagram has already taken a sizable loss as a part of their acquisition. As of today, the Facebook Instagram deal is worth quite a bit less than the original quote, currently valued at just over $741 million.
The New York Times issued a report earlier this week concerning how the urgency felt to close this deal by these two tech companies could have hurt Instagram in the long run.
The deal struck between these two companies didn’t provide a safety net for Instagram should Facebook’s stock perform as poorly as it has been. Instagram may have been taking a very risky gamble on Facebook by opting to receive so many shares of stock without any sort of protective measures. As such, this deal has already lost some of its luster and sheen, leaving Instagram to watch as their value sinks.
The social networking giant announced their intentions to purchase Instagram this April in an attempt to boost their lagging mobile platform and sharing options. Instagram became a huge hit in the iOS App Store soon after the iPhone 4 was released with a greatly improved camera.
With Instagram, users can snap pictures, edit them with a sundry of distressed and vintage filters and other effects, and then share them instantly with other Instagram users or their Facebook and Twitter accounts.
Just before Facebook announced their intentions, Instagram had released an Android version of their once iOS exclusive app, significantly expanding their user base. Last month, Instagram reported having 80 million active users.
According to their most recent 10Q regulatory filings, Facebook has said they intend to leave Instagram as is, saying they’ll maintain its products “as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing.”
Though the social giant didn’t have any additional comments or statements about the clearing of this deal, they did tell Reuters they were “pleased” the matter is finally over and done with.
Originally, Facebook had planned to have this deal completed by the end of their second quarter, but later changed their timeline, saying they hoped to have everything complete by the end of the year.
Now, it’s all official. Instagram is now a part of the Baby Blue Menlo Park Group, and I bet they can’t wait to start snapping pictures of all the crazy hackathons that take place on campus.