September 6, 2012
Systrom “Psyched” About Facebook/Instagram Deal Closing
Michael Harper for redOrbit.com — Your Universe Online
Well, it´s finally done and over with. The famous acquisition of Instagram by Facebook has finally cleared the books, so says Instagram CEO Kevin Systrom. Of course, it only makes sense for Systrom to announce this deal in one place: Facebook.
“We´re officially joining the Facebook family,” wrote Systrom in a blog post on the social site.
“I´m psyched for the next chapter of this long journey.”
Facebook´s vice President of Engineering Mike Schropfer also took some time to announce the deal on Facebook´s official blog post, saying that, now that all the paperwork is complete, the two companies can finally work together to “share moments with our friends.”
“As we said from the beginning, we are committed to building and growing Instagram independently. 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.”
The road which brought these two companies together is a storied one. Instagram launched in 2010 upon the release of Apple´s iPhone 4, which brought a greatly improved camera to the popular smartphone. Suddenly, users were taking high-definition shots and slathering them in vintage filters to create that distressed and old-time feel with photos taken in the modern age. First an iOS exclusive app, even Systrom had admitted his company had yet to find a way to grow a viable business model with 30 million users in their roster. One week before the $1 billion acquisition made news, Instagram finally made its way to the Android OS, significantly increasing their user base. With representation on the world´s two most popular mobile phone platforms, Instagram has been able to sign on more than 80 million users.
Just weeks ago, the two social companies were given the go-ahead to complete the deal as the FTC gave Facebook the nod to bring Instagram into their ranks. With no objections and no action taken against this acquisition process by the FTC, the two companies have finally become one.
Though this acquisition is sometimes seen as a bit of a love story between two social giants, the final acquisition did not come without a touch of drama. Last month, the New York Times reported on the loss Instagram has already taken on in this deal as a result of their alleged “rush” to finalize this acquisition. Without setting up preventative measures ahead of Facebook´s IPO, Instagram agreed to split up their $1 billion in $300 million cash and nearly 23 million shares of FB stock. Since the blundered IPO, Instagram's shares in Facebook have already lost a significant amount of value, bringing their total acquisition price from the headline-making $1 billion to $741 million.
When asked about this sudden drop in Facebook stock at a “fairness hearing” in California´s Department of Corporations last week, Systrom said the fallen stock didn´t concern him.
“We still believe firmly in the long-term value of Facebook,” said Systrom, according to the Wall Street Journal.
Keeping their eyes forward, Instagram wrote on their blog today: “What makes this even more exciting is that our deal with Facebook has closed, which means that we can now work together to evolve and build a better Instagram for everyone.”
“While our team is making the short move to the Facebook offices, Instagram isn´t going anywhere. The Instagram app and its features will stay the same one you know and love, and we´ll keep working together to build a better Instagram for everyone.”