Some interesting insight into Facebook’s $1 billion acquisition of Instagram.
Facebook is shelling out $300 million in cash and 23 million shares in Facebook common stock. And if the deal didn’t go through Facebook will agreed to pay a $200 million break-up fee. But perhaps most interesting—Facebook didn’t buy Instagram because the service was eating into its photo activity. Facebook’s photo activity grew faster than the rest of the site: on average more than 300 million photos were uploaded to Facebook every day in the first quarter, up from 250 million photos in the fourth quarter of 2011.
Facebook’s disclosure of risk factors sheds more light on its $550 million acquisitionof AOLpatents from Microsoft, which was announced today. The company says that the final outcome of the litigation is uncertain, and “if an unfavorable outcome were to occur in this litigation, the impact could be material to our business, financial condition, or results of operations.”
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