Facebook’s acquisition of Instagram approved by the Federal Trade Commission

Jerimiah Yap – Fourth Estate Cooperative Writer

San Francisco, CA, United States (4E) – Facebook’s acquisition of popular photo app Instagram was given the go-signal by the Federal Trade Commission (FTC). The FTC finished the investigation of the deal and Facebook was allowed to proceed to transact the $ 747 million deal. The deal includes $ 447 million in stock and $ 300 million in cash.

The deal was originally worth $ 1 billion because Facebook’s share price at the time of the filing of the acquisition was $ 30 each. If Instagram was acquired at the time Facebook offered its IPO the deal would’ve been worth $ 1.14 billion because of the $ 38 price tag per share.

“There were fears the buy might trigger serious anti-trust problems for Facebook but the FTC is apparently just fine with the acquisition,” TechCrunch reported.

The deal was unanimous in its vote by the FTC. With Facebook’s price declining steadily, Instagram founders Kevin Systrom and Mike Krieger have been working on some new features during the period. Instagram’s latest feature focuses on geo-located photos.

Unfortunately for Facebook, Instagram has little potential to monetize its potential. This has been pointed out by critics of the deal as well as Wall Street analysts.

But given the audience both Facebook and Instagram have, it’s likely that the two companies will figure out a business plan to capitalize on its massive user database.

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