Facebook, the world's largest social networking site, yesterday agreed to buy the popular photo-sharing app maker Instagram, for about $1 billion in cash and stock-its biggest acquisition to date.
Founded in 2010 by two young Stanford University graduates Mike Krieger and Kevin Systrom, San Francisco-based Instagram lets users take pictures with iPhone and Android smartphones, retouch them with borders and filters, and then post the photos on social networks to share with friends and relatives.
In a short span of two years, Instagram has acquired 30 million users, who have uploaded some 400 million photos or about 60 pictures per second.
Instagram was available only for Apple devices, but the company last week, released an Androidapp, which will now widen its user base substantially.
Instagram is yet to generate any significant revenue, but it plans introduce some form of advertising inside the app like allowing brands to drop sponsored photos into the stream on user's screens, or being paid by brands when users tap to buy something from them, according to The New York Times.
But the $1 billion price tag has surprised analysts since Instagram last week raised $50 million from venture capital firms Sequoia Capital, Benchmark Capital, Greylock Partners and others, which valued the start-up at $500 million.