Instagram turned down Twitter before selling to Facebook
By Barry Collins
Posted on 17 Dec 2012 at 09:06
Instagram executives reportedly turned down a $525 million offer from Twitter just weeks before selling to Facebook for $1 billion.
The news of Twitter's interest in the photography app comes amid a growing rift between the two companies, with Instagram images no longer displaying by default in tweets and Twitter unveiling its own photo filters.
Sources close to the negotiations between the two companies told the New York Times that Instagram had verbally agreed a price of $525 million with Twitter executives in March last year. However, Instagram chief executive Kevin Systrom reportedly turned down the offer because he wanted the site to "remain independent".
Only weeks later, Instagram had agreed its $1 billion deal with Facebook, which actually closed at $735 million because of a sharp fall in Facebook's share price.
Twitter executives were "shocked" that Instagram hadn't given them the opportunity to make a counter offer, as the company was willing to increase its bid, according to the New York Times report.
News of the Twitter bid could put Instagram's Systrom in a tight spot. In testimony given to the Californian Corporations Department, which was investigating whether Facebook's acquisition of Instagram was in the best interests of the social network's shareholders, Systrom repeatedly denied that there had been any other buyout offers for his company.
When pressed twice on whether he'd received bids from any other companies, Systrom answered: "We never received any formal offers or term sheets," without making mention of the verbal discussions with Twitter, according to the New York Times.
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"We never received any formal offers or term sheets"
Which makes it clear he did receive informal offers, not a surprise to anyone. Surprised he didn't go back to Twitter to try and get more out of them; suspect Facebook got in there with a too good to refuse take it or leave it offer. Instagram may not have been worth a billion but depriving Twitter of their userbase was worth it to Facebook.
By Mark_Thompson on 17 Dec 2012
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