Deal worth $1bn (£630m)
Leading social media website Facebook has bought Instagram, the company behind a smartphone application which allows users to enhance photographs with special effects and share them with friends.
The £1bn (£630m) deal will reportedly see 26-year-old chief executive officer Kevin Systrom take home $400m for selling his company, which has been running for only 15 months and has 13 employees. Systrom will remain in charge of the operation within Facebook, alongside co-founder Mike Krieger.
Since its launch in October 2010, Instagram has become a common feature in social media feeds everywhere, instantly recognisable for its nostalgic rendering of images in sepia or Polaroid-style tones. It has even been used in public posts by famous people such as pop star Rihanna and US presidential candidate Mitt Romney.
There has been some speculation that Facebook bought Instagram to neutralise its status as a competitor, as the popular app has a networking facility - with 30 million users on board - and people are increasingly using smartphones to access the internet instead of computers.
A simple idea executed well
However, in a blog post about the move, Facebook founder Mark Zuckerberg has focused on the positive similarities between the two companies. "This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," he said.
"We don't plan on doing many more of these, if any at all. But providing the best photo-sharing experience is one reason why so many people love Facebook, and we knew it would be worth bringing these two companies together."
Systrom and Krieger met at prestigious US university Stanford and the former was offered the opportunity to become involved with Facebook in 2004, shortly before it shot to success - but chose to remain focused on his studies.
Tom Glass, creative director at theEword, said: "Instagram captured attention quickly after its launch through its ability to give contemporary photographs a sentimental feel - and retained the users it attracted by making it so easy to share the results with friends. It's a simple idea executed well, which could also be said about the roots of Facebook."