US: Facebook exec defends $1B Instagram buy

Facebook’s head of mergers and acquisitions this week recounted the company’s acquisition of Instagram as calls for the breakup of the social media giant continue to drum up, reported CNBC. 

“I want to acknowledge that in some ways we absolutely considered Instagram a competitor,” Amin Zoufonoun, Facebook’s vice president of corporate development wrote in a post on Monday. “Since there has been a fair amount of chatter on that point, I think it is important to explain a little more about this.”

Zoufonoun was an integral part of Facebook’s US$1 billion purchase of Instagram in 2012, hammering out the details of the deal over the course of a weekend with CEO Mark Zuckerberg. The deal came after rival Twitter made a US$500 million bid for the photo-sharing startup.

In his post, Zoufonoun wrote that Instagram was not alone competing in the mobile photo-sharing space. He highlighted other rivals at the time including Foursquare, Path, VSCO Cam, Viddy, and Snapseed.

“It was a highly volatile space and it wasn’t at all clear who would stick around and who would fade away,” he wrote.

Zoufonoun also wrote that many analysts and critics doubted Facebook’s ability to compete in the mobile market, even after the deal was closed.

“Our hope was to bring together social networking and mobile photo sharing,” he said. “But without question, this was a big, unproven bet at the time.”

Full Content: CNBC

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