The United States Federal Trade Commission (FTC) has reached out to question search giant, Google and social network, Twitter for information regarding Facebook's recent $1 billion acquisition of photo sharing service, Instagram. The report comes from a source familiar to the matter, however, the source did not clarify what specific information the FTC was looking for. What is known is that the FTC automatically begins an investigation into any large sized acquisition. While the deal had been announced with high hopes from both parties of the acquisition, the deal is not completely sealed yet. Facebook says that they hope to complete the deal by the second quarter of this year. This deal is by far, the largest acquisition that Facebook has made.
Google and Twitter questioned for the acquisition
One of the major reasons that Facebook made the $1 billion acquisition was to bolster its mobile presence. The social network, which is currently the largest in the world with around 900 million users has been criticized for their regular mobile applications being very buggy. However, Facebook understands that photo sharing is an integral part of the user experience on the social network and Facebook wanted to enhance that feature. They also recognize that a large part of taking photos and sharing them is through mobile devices. The company has already rolled out filters to their photo uploader in the Facebook for Every Phone application. Some investors, however, have criticized Facebook's limited advertising revenue from its mobile platforms as a detriment to the social network's long term growth potential.
The Federal Trade Commission's investigation comes right before Facebook is preparing to raise as much as $12 billion in their initial public offering scheduled for later this month. This amount makes this IPO a record breaker. Facebook founder and CEO, Mark Zuckerberg has made it extremely clear that he will maintain an iron grip on the social network even after the IPO, making investors a little unsure. He says that he will control 56.9% of the voting shares of the company. On the matter of the questioning, both Facebook and Twitter had declined to comment while Google was not immediately available for comment.
Published Date: May 11, 2012 10:44 am | Updated Date: May 11, 2012 10:44 am