Facebook spends 1 Billion us$

The news that Facebook has purchased Instagram was not so surprising as it was more or less suspected but the price is quite shocking.

Instagram iPhone app is also now available for Android phones and with the original popularity of Facebook relating to the sharing of photos, Instagram will expand the Facebook mobile strategy and increase marketshare in that space as Instagram has a huge client base.

Facebook shares will also be traded on NASDAQ in the next month and I cannot help but wonder how the R1 Billion us$ purchase price is structured in terms of shares. Kevin Systrom, the CEO of Instagram and Mark Zuckerberg has already confirmed that Instagram will not be dissolved.

Facebook has an exciting and growing revenue stream in terms of advertising and unlike many other social marketing networks is very profitable. Facebook advertisers also report higher conversion rates and with a solid mobile strategy, Facebook is displaying maturity in ensuring future advertising growth and income.