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Facebook Acquisition Does Not Put Shutterfly in Play: Pro Trader

Which companies will own social media in years to come the way Google owns search now?

That’s a question you’ve probably asked yourself more than a few times, if you're among the throngs of investors hoping to get in on the ground floor of social media.

And on Monday, investors were tempted to make their next move after Facebook dropped $1 billion to buy the photo-sharing company Instagram.

According to the New York Times, 'Instagram is a social network built around cellphone photos. It lets people add quirky filters and effects to their snapshots and share them with friends, who can “like” and comment on them. The service has been something of a rising star in the start-up world. Barely two years old, it has attracted close to 30 million users, even though it worked only on iPhones until last week, when it released an Android version of its app.'

The acquisition is Facebook’s largest M&A deal ever. If Mark Zuckerberg is willing to spend so much for this company, do rivals such as Shutterfly belong in your portfolio?

Although your knee-jerk reaction may be to buy the dip, trader Brian Kelly, says resist the urge.

“I look at this development in the same way I look at Google’s purchase of YouTube. "Everyone goes around and says who's next, who else is out there? But there really isn’t the need for another one." In other words, he doesn’t think this acquisition will lead to a similar move made by another firm.

Meanwhile, if you’re eager to get into Facebook at the IPO, trader Steve Grasso says these developments should give you pause. “It calls into question how Facebook is going to spend its money."

Joe Terranova feels very differently. He likes the deal and says it's been in the making for years. “This gives Facebook a larger and much needed presence in the mobile space. This gets it done. I think it's a great acquisition.”

* You can find our conversation about Facebook at 7:30 into the video above.






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Trader disclosure: On Apr 9, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long RIMM; Karen Finerman is long HPQ; Karen Finerman is long SPY; Karen Finerman is long IWM; Karen Finerman is long MDX; Karen Finerman is short SPY; Joe Terranova is long VRTS; Joe Terranova is long IBM; Joe Terranova is long MED; Joe Terranova is long GS; Joe Terranova is long EMC; Joe Terranova is long MSFT; Joe Terranova is long HFC; Joe Terranova is long JOY; Joe Terranova is long OXY; Joe Terranova is long HPQ; Joe Terranova is long LQD; Joe Terranova is long COG; Steve Grasso is long ASTM; Steve Grasso is long AVAV; Steve Grasso is long BA; Steve Grasso is long D; Steve Grasso is long FRO; Steve Grasso is long MHY; Steve Grasso is long NUAN; Steve Grasso is long MO; Steve Grasso is long PFE; Steve Grasso is long PRST; Steve Grasso is long S; Steve Grasso is long XLU; Steve Grasso is long ZAZA; Brian Kelly is long USG; Brian Kelly is long IWM; Brian Kelly is long KRE; Brian Kelly is long US DOLLAR; Brian Kelly is short HYG; Brian Kelly is short YEN; Brian Kelly is short EUROSTOXX; Scott Nations is long SPY; Scott Nations is long C; Scott Nations is long BAC

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