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Facebook buys Instagram: a picture app is worth a thousand words and a billion dollars

Instagram photo of Facebook on April 10, 2012
Instagram photo of Facebook on April 10, 2012
Joe Armstrong/KPCC

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For those without smart phones, Facebook’s Monday purchase of the Instagram photo sharing application is nearly incomprehensible given the astounding selling price of $1 billion.

That’s ‘billion’ with a ‘B’ — making the acquisition the largest in Facebook’s history by a wide margin. For those with smart phones, the deal may be just as staggering considering that the app has yet to turn a profit, features no advertising and the team that created it has a scant 13 employees.

Instagram debuted in Apple’s App Store in 2010 as a free application that allowed people to use the camera on their iPhone to shoot, edit and share pictures within the app and across a panoply of social networking websites.

The app’s popularity grew quickly as users shared millions of pictures tweaked with various filters, among them a trendy variant that gave the images a classic, almost Polaroid-esque look that harkened back to the days of grainy film and yellowed prints.

The week before the Facebook purchase, Instagram became available in the Android app store and racked up 1 million new users in 12 hours – for current a total of 30 million users and counting. Tech experts are looking into their digital crystal balls to try and see what Facebook might do with their new acquisition.


What gives a commodity like Instagram such value? Will Facebook integrate Instagram functionality into their site, shut it down or simply let it continue to be one of the most popular apps available?


Mike Isaac, staff writer at Wired magazine

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