The first reports suggested that the acquisition of Instagram by Facebook was a simple deal. Eventually, it was narrated that actually, Twitter was also very interested in acquiring the photo-sharing service. And now, a number of people close to the deal are suggesting that Instagram’s CEO Kevin Systrom kind of played a game between Twitter and Facebook to have his company valued more.
Between Facebook and Twitter, it is only natural the Systrom was naturally inclined towards Facebook. The social network is more close to the photo-sharing service in terms of vision alignment and also would have paid a better sum for the acquisition.
So apparently, Systrom led Twitter on, enticing it to make Instagram a deal of hundreds of millions of dollars for the acquisition. At the same time, Systrom also kept on garnering funding, thus giving an impression that he wanted to have all the options on the tablet – that of being acquired by Twitter and of staying independing.
However, in real, Systrom was inviting an acquisition tag from Twitter so that he can then argue with Facebook through that and get a better quote from Facebook. And that, so the reports would suggest, is what he pretty much did. While Twitter was ready to pay some hundred million dollars for Instagram, Systrom was able to persuade Zuckerberg to pay a whooping $1 billion for it.
Not only that, Facebook’s payment also comprises of a huge chunk of its shares which may value the deal well beyond $1 billion if Facebook’s public valuation turns out to be more than $75 billion, which seems quite possible.