While shock abounded at the $1 billion price tage for Instagram it turns out the photo-app's owners actually wanted $2 billion. That
is the reported amount that Instagram co-founder Kevin Systrom demanded
from Facebook CEO Mark Zuckerberg during their feverish negotiations
earlier this month.
The
Facebook chief apparently phoned Systrom on Thursday April 5 and
informed the Instagram CEO he wanted to buy the two-year-old mobile
phone app.
Kevin Systrom, the chief executive of Instagram,
(right), with Mike Krieger, both Instagram co-founders, at the company
offices in San Francisco
Multi-billionaire Zuckerberg had been
shaken by projections of Instagrams future performance after the
app increased its user numbers by several million after becoming
available on the Android operating system.This
indicated to the social-network giant that Instagram wasn't an
exclusive product that only wealthy Apple iPhone users would pick up but
that it had wider appeal to the public.
Inviting Systrom to travel to his $7
million Palo Alto home in the three days after April 5, the two thrashed
out a deal for Facebook's take-over of Instagram.Demanding an honest appraisal from Zuckerberg as to what he believed Facebook would one day be worth, Systrom was told $200 billion.
While that placed Facebook into Google sized territory, Systrom made it known to Zuckerberg that he wanted $2 billion, 'If he believed Facebook would one day be worth as much as a company like Google at $200 billion or more, then the equivalent of 1% of Facebook would be sufficient to meet his price, Mr. Zuckerberg told Mr. Systrom.'
What is also incredible about the Instagram deal is the level of corporate scrutiny that Zuckerberg subjected it to with the Facebook board.
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