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Monday, April 9, 2012

Facebook to buy Instagram for $1 billion

The social network announced Monday that it is buying photo-sharing service Instagram, a two year-old San Francisco-based company that has attracted more than 30 million users, for $1 billion in a cash and stock deal.

The deal marks an attempt by Facebook to maintain dominance in an area that has proved one of its stickiest and most popular features: photo sharing. At the end of last year, Facebook users were uploading more than 250 million photos a day, on average, according to Facebook's filing with the SEC. The social network's members also spend nearly a fifth of their time on the site browsing photos, a 2011 comScore study found.

Instagram has, in just two short years, developed an offering that has proved attractive and compelling to a diverse group of users, and Facebook no doubt hopes to capitalize on the photo sharing app's expertise.

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