Billion dollar Instagram deal could be last of its kind for Facebook

Facebook's billion dollar deal with interest based photo sharing service Instagram looks at first glance like a modern entrepreneurship fairytale: an infant online mirco business going from zero to a billion in two years with a handful of employees. But, before giving up the day job, remortgaging the house and throwing all the eggs into a social networking basket, it's worth examining the deal more closely – this could be the first and last deal of its kind for Facebook.

“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. We don't plan on doing many more of these, if any at all,” said Facebook founder Mark Zuckerberg in a statement on the deal. A wish to keep Instagram separate and maintain its brand identity is stated and restated in Facebook's announcement, but exactly how this is achieved will be interesting to watch. A recent deal between Summify and Twitter left Summify users with mixed feelings, as some of their favorite features were removed. “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,” said Zuckerberg. Users will still be able to keep Instagram contacts and photos separate from Facebook, and a main motivator for the deal seems to be the decision to buy-in the interests based sharing system of Instagram, rather than developing a competing app. “These are different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook,” added the Facebook founder. Whatever the companies say, the practice of large outfits like Google, Facebook and Twitter gobbling up newer firms to gain apps and/or users is well established. Instagram is a photo sharing social network founded in 2010 by Kevin Systrom and Mike Krieger. The company currently has 13 employees and the most recent figures suggest in excess of 30 million users. The financial world is atwitter over Facebook’s initial public offering (IPO), planned for this year, when the company hopes to raise EUR 5 billion. Estimates put the company’s value at up to USD 100 billion, but Bloomberg has not included founder Mark Zuckerberg in its top 20 of the world’s wealthiest, as his share package in the world’s biggest social network is estimated to value less than the USD 22.6 billion necessary to get on the ranking. Liam Lever, liam@romania-insider.com