FTC Launches Probe Into Facebook's $1 Billion Instagram Acquisition
May 11, 2012 10:37 AM
comment(s) - last by
Facebook said it would pay Instagram a $200 million termination fee if the FTC blocked the deal
The U.S. Federal Trade Commission (FTC) is looking to investigate Facebook's acquisition of photo sharing program Instagram only one week before the
social network's massive IPO
According to the
, the FTC is launching an investigation regarding Facebook's Instagram acquisition in an effort to identify any clues of anti-competitive practices. The FTC isn't just picking on Facebook, though. The probe is common for any acquisition over $68.2 million because this number is tied to inflation.
Despite the probe being a routine practice, it could potentially hurt Facebook for the time being. The social network cannot use Instagram until the investigation is closed, delaying the mobile services it desperately seeks. In fact, some reports say the probe could take six to 12 months before completion.
Last month, it was reported that Facebook was interested in acquiring Instagram for $1 billion in cash and stock. The move aims to increase Facebook's mobile usage, since the company's amended S-1 filing with the Securities and Exchange Commission on Wednesday mentioned that Facebook revenue will decline as more user's access the site from mobile devices instead of PCs.
The filings also said that the boost in mobile usage has led to a user base that is expanding faster than the number of advertisements provided.
"If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected," said the filing.
In addition to mobile woes, Facebook is looking to go public with its
$100 billion initial public offering on May 18
and likely didn't need the extra trouble only one week before establishing its ticker symbol "FB."
Facebook said it would pay Instagram a $200 million termination fee if the FTC blocked the deal.
This article is over a month old, voting and posting comments is disabled
RE: Why instagram?
5/11/2012 12:37:33 PM
These fast growing applications is where the tech bubble is. Any company that grows that fast can be replaced by another and be devalued instantly.
"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation
Facebook to Go Public May 18
May 2, 2012, 1:47 PM
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Instagram Bans "Curvy" From Hashtag Searches, Provokes "Plus Sized" Outrage
July 16, 2015, 1:20 PM
Mozilla Promise Punctual Windows 10 Firefox Release, Teases at iOS Arrival
July 7, 2015, 3:08 PM
Netflix Announces 7-to-1 Stock Split, Eyes Explosive Overseas Growth
June 23, 2015, 8:18 PM
Most Popular Articles
Samsung Gear S2 Borrows Circular Icons From Apple Watch
August 21, 2015, 2:48 PM
Future of Lumia Uncertain as Microsoft Lays Off 2,300, Closes 1 of 3 Finnish Offices
August 24, 2015, 6:14 PM
Kentucky Man Faces up to 10 Years in Prison for Shooting Drone Trespasser
August 13, 2015, 2:58 PM
Microsoft's Windows 10 Leaves Lumia 530 Behind w/ 8 GB Storage Requirement
August 25, 2015, 4:02 PM
Aluminum 7003, Used in Roofing, May be Tapped by Apple for iPhone 6S/6S+
August 24, 2015, 4:45 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2015 DailyTech LLC. -
Terms, Conditions & Privacy Information