The deal was cleared by the FTC last week, and today passed a “fairness hearing” held by the California Department of Corporations, which means the deal is all set to be finalized. It is expected that the deal could officially close by the end of the week.
But, we don't really care about the deal. We care more about how the deal came about, and the info on that is pretty surprising. According to Instagram CEO Kevin Systrom, Facebook bid against itself for the right to pay $1 billion to acquire the company. That's right, there were absolutely no other bids out there to purchase the company. Facebook was all alone and still paid twice the market value of the company. Even better, Facebook paid twice the market value for the right to buy a company that loses $2.7 million a year.
The deal may still be good for Facebook overall, because apparently the company was working on its own photo sharing service, but a Facebook development executive, Amin Zoufonoun, said that Instagram was better.