Now that news of Facebook's acquisition of Instagram has had time to settle, more details of the went on behind the scenes are starting to emerge
Now that news of Facebook’s acquisition of Instagram has had time to settle, more details of the went on behind the scenes are starting to emerge.One of the more fascinating things to come out is that the acquisition was seemingly a Mark Zuckerberg production, almost exclusively. That is to say, the Instagram deal was Zuckerberg’s brain child and he engaged in negotiations with Intstagram’s Kevin Systrom without telling the board until the acquisition was all but a done deal.
According to a recent report in the Wall Street Journal, Facebook’s board of directors weren’t made aware of the pending deal until Sunday, April 8. One person familiar with Facebook explained that the board “was told, not consulted.”
Also noteworthy, if not downright fascinating, is that Systrom’s initial asking price was a whopping $2 billion.
Negotiating mostly on his own, Mr. Zuckerberg had fielded Mr. Systrom’s opening number, $2 billion, and whittled it down over several meetings at Mr. Zuckerberg’s $7 million five-bedroom home in Palo Alto. Later that Sunday, the two 20-somethings would agree on a sale valued at $1 billion.It was a remarkably speedy three-day path to a deal for Facebook—a young company taking pains to portray itself as blue-chip ahead of its initial public offering of stock in a few weeks that could value it at up to $100 billion.
So in just 3 days, Zuckerberg managed to wrap off the largest acquisition in Facebook history, and indeed, one that rivals the largest tech acquisitions in history. And all for a mobile app with no revenue.That notwithstanding, Intstagram is a social photo haven, and though its functionality isn’t necessarily unique (there are actually some better photo filter apps out there), Intstagram has the user base (over 35 million+ and growing) and the foothold in mobile that Facebook so desperately covets. As part of the deal, Zuckerberg assured Systrom that Facebook wouldn’t do anything to tinker with Instagram’s recipe for success. To that end, Intstagram will remain independent of Facebook, a fact Zuckerberg emphasized in his Facebook post wherein he announced the deal.
