Facebook has announced that it will be purchasing the popular photo manipulation and sharing app Instagram for $1 billion in both cash and shares.

The social networking giant posted on the gaining yesterday, on its site, as well as on CEO and co-founder Mark Zuckerberg’s Timeline on Facebook.

Both Facebook and Instagram have insisted that existing users of the app will have the same experience they’ve grown to love and would keep Instagram independent. Facebook added that such a large purchase would be rare for the company, which is set to go public soon.

Facebook is currently the largest photo-storage site in the world, with an average of 250 million photos uploaded per day (according to sources); therefore photos are critically important for Facebook. Instagram has taken the photo arena by storm, with its delightful and elegant app and the motto, “Fast beautiful photo sharing.”

Already sparking upset amongst Instagram fans and questions on the new potential ’look and feel’ this buy out has definitely caused a stir but whatever the purchase means in the long term a major take-over has just taken place for Instagram as the smartphone app just made a billion dollars overnight!

For all the details, here is the full press release from Facebook:

MENLO PARK, CALIF.-April 9, 2012-Facebook announced today that it has reached an agreement to acquire Instagram, a fun, popular photo-sharing app for mobile devices.

The total consideration for San Francisco-based Instagram is approximately $1 billion in a combination of cash and shares of Facebook. The transaction, which is subject to customary closing conditions, is expected to close later this quarter.
Mark Zuckerberg, founder and CEO of Facebook, posted about the transaction on his Timeline:

I’m excited to share the news that we’ve agreed to acquire Instagram and that their talented team will be joining Facebook.
For years, we’ve focused on building the best experience for sharing photos with your friends and family. Now, we’ll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests.

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.

These and many other features are important parts of the Instagram experience and we understand that. We will try to learn from Instagram’s experience to build similar features into our other products. At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.

This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all. But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together.

We’re looking forward to working with the Instagram team and to all of the great new experiences we’re going to be able to build together.

(via Geekosystem)