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Facebook’s Instagram Acquisition Deal Cleared by FTC (FB)

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Bringing an end to its antitrust investigations on Wednesday, the U.S. Federal Trade Commission has approved Facebook Inc.’s (NASDAQ:FB) acquisition of Instagram. Accordingly, Facebook is now allowed to complete its acquisition of Instagram.

Earlier in April, the social networking website had announced that it is acquiring Instigram, a mobile photo application maker, for $1 billion in both cash and stock.

Based on Wednesday’s closing price of Facebook stock ($19.44), the deal at present is valued at $747.1 million.

Apparently, acquisition of Instagram could boost the price of Facebook stock which has been hammered ever since the social network made its public debut. The stock has slipped on concerns over falling revenue per user and flagging revenue from online advertisers.

Adding Instagram application would enable Facebook users to add filters and effects to pictures taken through mobile phones.

Furthermore, the deal would also mean that rapidly growing mobile application company, which boasted to have 80 million users in July, will not be acquired by rival companies such as Google Inc. (NASDAQ:GOOG) or Twitter.

Nonetheless, the hefty price which Facebook has agreed to pay for a mere two year old company left many investors and analysts dumbfounded.

 

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