Tech

Facebook exec behind $1 billion Instagram acquisition goes on defensive as antitrust probes heat up

Key Points
  • Amin Zoufonoun, Facebook's vice president of corporate development, recounted the company's acquisition of Instagram in a Facebook post Monday.
  • Zoufonoun was an integral part of Facebook's $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 Federal Trade Commission had all this context when they thoroughly reviewed the deal in 2012," he wrote. "They looked at the competitive landscape, reviewed our documents, and decided not to challenge the acquisition."
  • Zoufonoun's post comes as government agencies probe Facebook over antitrust concerns and presidential candidates call for the company to be broken up.
Facebook CEO Mark Zuckerberg walks to meetings for technology regulations and social media issues on September 19, 2019, in Capitol Hill, Washington, DC.
Brendan Smialowski | AFP | Getty Images

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.

"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 $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 $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."

Zoufonoun added that Instagram was dealing with numerous challenges, including a spam infestation and no revenue model, that Facebook tackled.

"Since many start-ups are held back by weak execution on basic issues, helping Instagram get past these hurdles made it much more likely to succeed," he said.

Zoufonoun's comments come as Facebook faces four separate antitrust investigations and calls for a breakup from company co-founder Chris Hughes and Democratic presidential candidate Sen. Elizabeth Warren.

Zuckerberg similarly defended the company's Instagram acquisition last month during Facebook's third-quarter earnings call.

"The Federal Trade Commission had all this context when they thoroughly reviewed the deal in 2012," Zoufonoun said. "They looked at the competitive landscape, reviewed our documents, and decided not to challenge the acquisition."

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