FTC Okays Facebook’s Instagram Purchase; What’s Next?
Facebook officially owns Instagram.
The Federal Trade Commission (FTC) voted unanimously to approve the deal after reviewing potential antitrust issues. From the organization’s news release:
The Federal Trade Commission has closed its nonpublic investigation of Facebook’s proposed acquisition of Instagram, Inc., without taking any action. Accordingly, the deal may now proceed as proposed.
The two companies announced the deal in early April and reports pegged the value at $1 billion in cash and stock. Facebook has since gone public, its stock price is about half of what it was on opening day, and the deal’s current value is far less than a billion dollars.
What Happens Next?
Unlike many tech mergers/acquisitions, Facebook’s Instagram purchase involves a substantial user base that, according to Instagram, recently reached more than 80 million people. Facebook was buying much more than a photo sharing app; it was buying a passionate community — many of whom were not thrilled about the news.
That makes the possible integration of Instagram into Facebook a delicate topic.
It’s reminiscent of Yahoo’s 2005 purchase of Flickr — a deal that prompted a minor revolt among some Flickr users, especially when Yahoo announced that all Flickr users would need to convert to Yahoo accounts to continue using the service.
When he announced the Instagram deal, Facebook founder and CEO Mark Zuckerberg promised to tread carefully.
We believe 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.
That’s why 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.
We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.
We reached out to Facebook today to find out if that’s still the plan, but a company spokesperson would only provide this reaction to the FTC’s announcement:
“We are pleased that the Federal Trade Commission has cleared the transaction after its careful and thorough review.”