When Facebook announced they were purchasing Instagram for a staggering $1bn, the internet was left flabbergasted.
The huge price tag was apparently the result Facebook’s paranoia that Instagram would become a Twitter owned property, reports Venture Beat.
The article tells of how Twitter made “a very real offer in the hundreds of millions of dollars range”. Insatgram apparently did not sign the term sheet, thereby not tying them to a no-shop clause. This allowed Kevin Systrom (Instagrams co-founder) to approach Facebook in search of a better deal. It is reported Zuckerberg “bid just to block the Twitter deal”.
With Facebook looking to keep a hold of the photo sharing market that made the social network so successful, the acquisition of the wildly popular, hipster-photo app was certainly a smart one. Whether the valuation was the reaction to Twitter’s offer or based solely on startups own merits may never be known. In either case, things are looking pretty sweet for Instagram right now.