Instagram Buy Out
Mark Zuckerberg bought Instagram as it was a ‘threat’ to …
The US House antitrust subcommittee has made public the email exchanges between Facebook CEO Mark Zuckerberg and former chief financial officer David Ebersman, revealing that the company (and Zuckerberg, in particular) wanted to buy Instagram to avoid competition as it could have hurt the social network.
Rep Jerry Nadler (D-NY) on Wednesday grilled Zuckerberg about the Instagram acquisition during the testimonies from the Big Tech CEOs, including Amazon’s Jeff Bezos, Sundar Pichai of Google and Tim Cook of Apple.
The emails revealed that Zuckerberg wanted to buy Instagram as it was becoming a threat to Facebook.
“Facebook, by its own admission saw Instagram as a threat that could potentially siphon business away from Facebook, ” Nadler said during the hearing on Wednesday.
“So rather than compete with it, Facebook bought it. This is exactly the type of anti-competitive acquisition the antitrust laws were designed to prevent, ” Nadler added.
Facebook bought Instagram for $1 billion in 2012, a shocking sum at that time for a company with 13 employees,
Instagram today has over one billion users and contributes over $20 billion to Facebook’s annual revenue.
“I think the FTC had all of these documents and unanimously voted at the time not to challenge the acquisition, ” Zuckerberg said on Wednesday.
“In hindsight, it probably looks obvious that Instagram would have reached the scale that it has today. But at the time, it was far from obvious. ”
According to The Verge, the FTC completed its review of the acquisition in 2012 without holding any open hearings or issuing a public report.
The agency said it might reopen the inquiry at an unspecified future date, “as the public interest may require. ”
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Top 5 Companies Owned by Facebook – Investopedia
Facebook Inc. (FB), the world’s largest social networking website, was founded by CEO Mark Zuckerberg and several Harvard College roommates in 2004. The company’s name initially was FaceMash, which was changed to TheFacebook, eventually dropping “The” from its name to become, simply, Facebook. Zuckerberg and his co-founders initially launched the service for their Harvard classmates, quickly expanding it to other universities and then to the general public. The company since then has grown into a global giant with 2. 8 billion users and a market cap of $926. 8 billion. The company reported FY 2020 net income of $29. 1 billion on $84. 1 billion in revenue, nearly all of which came from advertising.
Facebook has expanded far beyond its original social networking platform since its founding 16 years ago. Its products also include messenger services, photo and video sharing, augmented reality, and many other apps and services. Acquisitions have been key to growing these businesses and Facebook’s revenue in general. Facebook’s strategy has been to buy potential rivals before they can get too big. In the process, the company sometimes has paid exceptionally high prices for some deals. The company has also drawn attention from the Federal Trade Commission (FTC) due to potential anticompetitive practices, with the FTC recently demanding data on unreported purchases from Facebook as well as other big tech companies.
On Oct. 4, 2021, Facebook and its associated apps such as Instagram, WhatsApp, and Messenger were down for several hours. This was the first major outage since Facebook was offline for an entire day in 2019.
Below, we look in more detail at Facebook’s 5 biggest acquisitions. The company does not provide a breakdown of how much profit or revenue each acquisition currently contributes to Facebook.
Instagram
Type of Business: Photo and video-sharing appAcquisition Cost: $1. 0 billionAcquisition Date: April 9, 2012
Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can upload, edit, and tag photos and videos. The company remained independent up until it was acquired by Facebook for $1. 0 billion in 2012. While Facebook bought Instagram as the photo-sharing company was garnering significant attention from venture capital firms and other investors. Some estimates indicate that Instagram generates more advertising revenue than its parent company.
When it acquired Instagram, Facebook opted to build and grow the Instagram app independently from Facebook’s main platform; Instagram remains a separate platform to this day. The price that Facebook paid for Instagram, which at that time was generating no revenue, reflects Facebook’s willingness to pay a premium for young companies.
WhatsApp
Type of Business: Mobile messenger serviceAcquisition Cost: $19. 0 billionAcquisition Date: February 19, 2014
WhatsApp is a messenger and calling service available to users throughout the world. The platform was launched in 2009 as a low-cost alternative to standard text messaging services. Throughout much of its history, WhatsApp has allowed users to send messages and make calls directly to other users for no cost, regardless of location. Users can also send photos, videos, and documents over the platform. Facebook bought WhatsApp at a time when the smaller company boasted more than 400 million active monthly users, making it a fast-growing potential rival to Facebook’s platform.
When Facebook purchased WhatsApp, it was an independent company that had recently been valued at $1. 5 billion. Although it is unclear exactly how much revenue WhatsApp generates, some estimates are that WhatsApp revenue will be as high as $5 billion by 2020.
Oculus VR
Type of Business: Virtual reality technology companyAcquisition Cost: $2. 0 billionAcquisition Date: March 25, 2014
Just weeks after announcing its acquisition of WhatsApp, Facebook followed up by buying virtual reality hardware and software company Oculus VR. This company was founded in 2012 and is best known for its Oculus Rift product, a virtual reality headset that was designed for video gaming. Since Facebook’s purchase of Oculus VR in 2014, the subsidiary has made multiple acquisitions of its own. Perhaps the most prominent was the 2015 purchase of Surreal Vision, a company specializing in 3D scene mapping reconstruction.
At the time that Facebook acquired Oculus VR, the company had only produced a development prototype of what would become its popular headset product. Facebook’s purchase of Oculus VR gave it an instant presence in the virtual reality market at a time when developers were showing growing interest in VR.
Onavo
Type of Business: Mobile web analyticsAcquisition Cost: $100–200 million (estimated)Acquisition Date: October 2013
Founded in 2010, Israeli company Onavo performs web analytics on other mobile apps to determine customer usage. Facebook acquired Onavo in October 2013 for an undisclosed amount that some analysts estimated to be between $100 million and $200 million. At the time of the acquisition, Onavo was an independent company. Although Onavo is not one of Facebook’s largest acquisitions, Onavo’s technology may have allowed Facebook to make crucial early determinations about other companies and apps to acquire. Onavo has occasionally been classified as spyware, forcing Facebook to pull Onavo from both the iOS and Android app stores in the face of criticism.
Beluga
Type of Business: Messaging serviceAcquisition Cost: UndisclosedAcquisition Date: March 2, 2011
Messaging app service Beluga, founded in 2010, was acquired by Facebook a year later. Facebook bought Beluga in the midst of the startup’s fundraising process for an undisclosed sum. In buying Beluga, Facebook acquired the technology that eventually became the social media company’s highly successful Messenger platform. In the process, Facebook again expanded its offerings and eliminated a potential rival.
Facebook Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Facebook’s commitment to diversity, inclusiveness, and social responsibility. The below chart illustrates how Facebook reports the diversity of its management and workforce. This shows if Facebook discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.
Facebook Diversity & Inclusiveness Reporting
Race
Gender
Ability
Veteran Status
Sexual Orientation
Board of Directors
C-Suite
General Management
✔ (U. S. Only)
✔
Employees
✔ (U. Only)
✔
When Did Facebook Buy Instagram & How Much Did It Pay?
Facebook is once again facing criticism over its Instagram acquisition, so here’s a closer look at when the deal took place and how much it cost.
Facebook’s acquisition of Instagram recently hit the headlines, in spite of the deal taking place almost a decade ago. The Federal Trade Commission accused the social media giant of illegal monopolization as it looks to reverse the high-profile acquisition, a deal that the FTC voted in favor of back when it was first announced. In light of these recent events, here’s a quick look at when Facebook acquired Instagram, and how much the company paid for the photo-sharing app.
Even though the Facebook-Instagram merger is now under the spotlight, this is not the first time this year that the company has faced scrutiny for its Instagram purchase. Facebook CEO Mark Zuckerburg encountered backlash over the same issue months ago, due to a series of emails that were unearthed suggesting that the merger was completed with the intent of consolidating the competition before it became a potential threat.
Facebook announced and finalized the deal back in 2012. The original April 2012 announcement confirmed the acquisition cost $1 billion in a combination of cash and company shares, and included a lengthy public announcement from the company’s CEO. Zuckerberg expressed that the intent was to keep “building and growing Instagram independently” instead of just integrating the service and features into Facebook. Zuckerberg went on to say that the acquisition was “an important milestone” for the company and that Facebook had no intention of “doing many more of these, if any at all. ”
Facebook’s Instagram Purchase Was Only The Beginning
While the Facebook CEO’s public statement from eight years ago gave the impression the company’s expansion days were over, what happened afterwards didn’t exactly marry with that idea. Facebook went on to acquire a number of other businesses over the years. One of the more notably additions was the widely-utilized messaging app WhatsApp and this was quickly followed up with the purchase of Oculus VR. Even more recently, the company invested in and acquired Giphy, the animated graphic database.
Whether or not Facebook continues its expansion still remains to be seen, but that doesn’t change the fact that it has certainly accumulated quite a number of companies after initially claiming little intention of doing so. Likewise, despite Zuckerberg’s claims of building Instagram separately from Facebook, and even though they are still separate apps and services today, there have been signals that the two have gotten closer to becoming one since then. The most recent example of this was when Facebook started testing a feature that seemingly blurs the lines between both platforms, by providing the option to view Instagram Stories in the Facebook app.
More: Facebook Vanish Mode: Using Instagram & Messenger’s Disappearing Messages
Source: Facebook
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About The Author
Kyle Encina
(224 Articles Published)
Kyle Encina is a writer with over five years of professional experience, covering topics ranging from viral entertainment news, politics and movie reviews to tech, gaming and even cryptocurrency. During his free time, he indulges in composing melodies, listening to inspiring symphonies, physical activities, writing fictional fantasies (stories) and of course, gaming like a madman!
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Frequently Asked Questions about instagram buy out
Why did Instagram get bought out?
The emails revealed that Zuckerberg wanted to buy Instagram as it was becoming a threat to Facebook. “Facebook, by its own admission saw Instagram as a threat that could potentially siphon business away from Facebook,” Nadler said during the hearing on Wednesday. “So rather than compete with it, Facebook bought it.Jul 30, 2020
Did Instagram get bought out?
Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can upload, edit, and tag photos and videos. The company remained independent up until it was acquired by Facebook for $1.0 billion in 2012.Dec 9, 2020
When did Facebook buy Instagram?
Facebook announced and finalized the deal back in 2012. The original April 2012 announcement confirmed the acquisition cost $1 billion in a combination of cash and company shares, and included a lengthy public announcement from the company’s CEO.Dec 10, 2020
