Zuckerberg agreed to pay $1 billion for Instagram in 2012. But did you know what he wrote in an email that same day?
"Instagram was our threat. You were basically right. One thing about startups, though, is you can often acquire them."
In early 2012 Facebook was months from its stock market debut. In late January one of its employees wrote, in an email later released by the House Antitrust Subcommittee: "Instagram is eating our lunch." In February Mark Zuckerberg emailed his CFO that photo start-ups "could be very disruptive to us" and that buying them "now" would give Facebook "a year or more"; 45 minutes later he added: "I didn't mean to imply that we'd be buying them to prevent them from competing with us in any way."
On 9 April 2012 Facebook announced it would acquire Instagram for "approximately $1 billion in a combination of cash and shares". Zuckerberg said: "We don't plan on doing many more of these, if any at all." The same day he wrote to an employee: "Instagram was our threat. You were basically right. One thing about startups, though, is you can often acquire them."
The deal closed in August 2012. Facebook's own filing recorded a purchase price of $521 million plus $194 million in unvested employee shares, about $715 million at closing. On 29 July 2020 the subcommittee released the emails; Zuckerberg told the hearing: "I've always been clear that we viewed Instagram both as a competitor and as a complement to our services." By closing day, more than 5 billion photos had been shared on Instagram.
Every acquisition memo is discoverable. This one took eight years.
True story, about 90 seconds. AI-generated illustration with narration by an AI voice; sources in the first comment.
What the captions say
- Mark Zuckerberg agreed to pay $1 billion for Instagram. But do you know what he wrote in an email that same day?
- In early 2012, Facebook was months from its stock market debut. In January, one of its employees wrote: "Instagram is eating our lunch."
- In February, Zuckerberg emailed his finance chief: these photo start-ups "could be very disruptive to us", and buying them now would give Facebook "a year or more".
- 45 minutes later he wrote again: "I didn't mean to imply that we'd be buying them to prevent them from competing with us in any way."
- On 9 April, Facebook announced the deal: about $1 billion for Instagram, in cash and shares. Zuckerberg said: "We don't plan on doing many more of these."
- The same day, he wrote to an employee: "Instagram was our threat. You were basically right. One thing about startups, though, is you can often acquire them."
- 8 years later, Congress released the emails.
- Zuckerberg told the hearing he had viewed Instagram "both as a competitor and as a complement".
- By then Instagram had been part of Facebook for 8 years. And the email he sent that day was public record.
