Facebook to buy Instagram for $1 billion

San Francisco: Facebook Inc., the world’s biggest social networking service, agreed to buy the Instagram mobile photo-sharing application for about $1 billion in cash and stock, its biggest acquisition yet.

The transaction is expected to close later this quarter, Menlo Park, California-based Facebook said on Monday in a statement on its site. The company plans to let Instagram remain independent from Facebook. “We need to be mindful about keeping and building on Instagram’s strengths and features rather than just trying to integrate everything into Facebook,” Facebook chief executive officer Mark Zuckerberg said in a posting on his page. “That’s why we’re committed to building and growing Instagram independently. Millions of people around the world love the Instagram app and the brand associated with it, and our goal is to help spread this app and brand to even more people.”

The deal marks the first time Facebook has acquired a product and company with so many users, Zuckerberg said. Facebook is bolstering its features as it prepares for an initial public offering (IPO). The company plans to raise $5 billion in the IPO, making it the biggest Internet offering on record. The IPO would value Facebook at as much as $100 billion, according to people familiar with the matter.

Instagram, introduced in October 2010 by Kevin Systrom and Mike Krieger, has more than 30 million registered users. Last week, Instagram added an application for Android phones, building on its following among users of Apple Inc.’s iPhone.

“Facebook isn’t planning more deals of this type,” Zuckerberg said. “But providing the best photo-sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together,” he said.

Sarah Frier in New York and Ari Levy in San Francisco contributed to this story.

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