This is very interesting! It is reminiscent of the later days before the “Dot Com Bust” of the nineties when venture capitalists were eager to purchase whatever edge they could get in the Internet “unreal-estate market” and major buy outs were occuring on a regular basis. Of course this has been going on for years now but Facebook is certainly setting a higher bar on what is acceptable for an acquisition.
Originally posted on VentureBeat:
The secret details of the $1 billion deal between Facebook and Instagram are more convoluted than anyone thought. VentureBeat has learned that Instagram chief executive and co-founder Kevin Systrom first got an offer and a term sheet from Twitter, then shrewdly doubled the value of his young company by striking a deal with Facebook.
On Monday, April 9, Facebook announced that it was buying photo-sharing sensation Instagram for $1 billion in cash and stock. The unexpected, mammoth deal was a shock to the Internet community, and to many of Instagram’s own investors — including new investors in a $50 million round of funding that closed prior to the buyout (Instagram has yet to confirm the round).