The folks at Instagram – screamingly popular free photo-sharing app – announced about an hour ago that they are being bought by Facebook for the mind-numbing price of $1 billion (definitely billion with a “b”).
Facebook announced here and Instagram humbly announced they were being bought here. Both parties – Facebook’s Mark Zuckerberg and Instagram’s Kevin Systrom – insist that the photo sharing service would be allowed to grow and operate independently.
The real news isn’t the purchase itself, but the price. One billion dollars in cash and stock is a huge, huge number for an acquisition in Internet-land – already branded a block-buster deal that is sending shockwaves through Silicon Valley (figuratively, of course). Could a photo sharing app possibly be worth that much (keep in mind the company has a grand total of NINE employees)? Is Facebook simply trying to bolster it’s own value before their impending IPO?
It will be interesting to see how this plays out over the next couple of days, for sure.