U.S. authorities allowed Facebook to purchase Instagram

U.S. authorities allowed Facebook to purchase InstagramU.S. Federal Trade Commission (FTC) has approved the acquisition of popular mobile service Instagram by Facebook Company, which was announced four months ago. According to the decision of the state regulator, the transaction will not affect market competition.

Long investigation regarding the conditions of purchase has been considered by many people as an opportunity to talk about the cancellation of the transaction. But the FTC approved the merging of the social network and photo service unanimously.

The total value of the transaction at the time of its announcement was $1B. But only 30% of the sum was cash, the remaining funds were Facebook shares estimated at $ 30 per share at that time. After a not very successful IPO the shares of the social network dropped significantly in price, and now they are sold at half the price. Thus, the creators of the photo service will get about $750M.

In its statement on the decision, the FTC commissioners noted a weak position of Facebook's own photo service on the market - Facebook Camera - and a lot of competing products (Camera +, Camera Awesome, Hipstamatic, etc.). Also, in their opinion, the transaction will not weaken the competition because Instagram does not earn money and has limited ability to monetize its service. And finally, strong position of Facebook's main competitor on the market was also considered - search engine Google.

Once the deal is finalized officially, Facebook will be able to start integrating Instagram in its own social network.