How owns instagram
Top 5 Companies Owned by Facebook (Meta)
Photo and video-sharing, virtual reality, and messenger services
By
Nathan Reiff
Full Bio
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
Learn about our editorial policies
Updated October 16, 2022
Reviewed by
Margaret James
Reviewed by Margaret James
Full Bio
Peggy James is a CPA with over 9 years of experience in accounting and finance, including corporate, nonprofit, and personal finance environments. She most recently worked at Duke University and is the owner of Peggy James, CPA, PLLC, serving small businesses, nonprofits, solopreneurs, freelancers, and individuals.
Learn about our Financial Review Board
Meta Inc. (META), the company which owns Facebook, the world's largest social networking website, was founded by CEO Mark Zuckerberg and several Harvard College roommates in 2004. The company's name initially was FaceMash, which was changed to TheFacebook, eventually dropping "The" from its name to become Facebook, before being changed yet again to Meta in Oct. 2021. Zuckerberg and his co-founders initially launched the service for their Harvard classmates, quickly expanding it to other universities and then to the general public. The company since then has grown into a global giant with 2.8 billion users and a market cap of $926.8 billion. The company reported FY 2020 net income of $29.1 billion on $84.1 billion in revenue, nearly all of which came from advertising.
Meta has expanded far beyond its original social networking platform since its founding 16 years ago. Its products also include messenger services, photo and video sharing, augmented reality, and many other apps and services.
Acquisitions have been key to growing these businesses and Meta's revenue in general. Meta's strategy has been to buy potential rivals before they can get too big. In the process, the company sometimes has paid exceptionally high prices for some deals. The company has also drawn attention from the Federal Trade Commission (FTC) due to potential anticompetitive practices, with the FTC recently demanding data on unreported purchases from Meta as well as other big tech companies.
Below, we look in more detail at Meta's 5 biggest acquisitions. The company does not provide a breakdown of how much profit or revenue each acquisition currently contributes to Meta.
- Type of Business: Photo and video-sharing app
- Acquisition Cost: $1.0 billion
- Acquisition Date: April 9, 2012
Instagram is a photo and video-sharing social networking platform that was launched in 2010. Through the Instagram app, users can upload, edit, and tag photos and videos.
The company remained independent up until it was acquired by Meta for $1.0 billion in 2012. While Meta bought Instagram as the photo-sharing company was garnering significant attention from venture capital firms and other investors. Some estimates indicate that Instagram generates more advertising revenue than its parent company.
When it acquired Instagram, Meta opted to build and grow the Instagram app independently from Meta's main Facebook platform; Instagram remains a separate platform to this day. The price that Meta paid for Instagram, which at that time was generating no revenue, reflects Meta's willingness to pay a premium for young companies.
- Type of Business: Mobile messenger service
- Acquisition Cost: $19.0 billion
- Acquisition Date: February 19, 2014
WhatsApp is a messenger and calling service available to users throughout the world. The platform was launched in 2009 as a low-cost alternative to standard text messaging services.
Throughout much of its history, WhatsApp has allowed users to send messages and make calls directly to other users for no cost, regardless of location. Users can also send photos, videos, and documents over the platform. Meta bought WhatsApp at a time when the smaller company boasted more than 400 million active monthly users, making it a fast-growing potential rival to the Facebook network platform.
When Meta purchased WhatsApp, it was an independent company that had recently been valued at $1.5 billion. Although it is unclear exactly how much revenue WhatsApp generates, some estimates are that WhatsApp revenue will be as high as $5 billion by 2020.
Oculus VR
- Type of Business: Virtual reality technology company
- Acquisition Cost: $2.0 billion
- Acquisition Date: March 25, 2014
Just weeks after announcing its acquisition of WhatsApp, Meta followed up by buying virtual reality hardware and software company Oculus VR. This company was founded in 2012 and is best known for its Oculus Rift product, a virtual reality headset that was designed for video gaming.
Since Facebook's purchase of Oculus VR in 2014, the subsidiary has made multiple acquisitions of its own. Perhaps the most prominent was the 2015 purchase of Surreal Vision, a company specializing in 3D scene mapping reconstruction.
At the time that Meta acquired Oculus VR, the company had only produced a development prototype of what would become its popular headset product. Meta's purchase of Oculus VR gave it an instant presence in the virtual reality market at a time when developers were showing growing interest in VR.
Onavo
- Type of Business: Mobile web analytics
- Acquisition Cost: $100–200 million (estimated)
- Acquisition Date: October 2013
Founded in 2010, Israeli company Onavo performs web analytics on other mobile apps to determine customer usage. Meta acquired Onavo in October 2013 for an undisclosed amount that some analysts estimated to be between $100 million and $200 million. At the time of the acquisition, Onavo was an independent company.
Although Onavo is not one of Meta's largest acquisitions, Onavo's technology may have allowed Meta to make crucial early determinations about other companies and apps to acquire. Onavo has occasionally been classified as spyware, forcing Meta to pull Onavo from both the iOS and Android app stores in the face of criticism.
Beluga
- Type of Business: Messaging service
- Acquisition Cost: Undisclosed
- Acquisition Date: March 2, 2011
Messaging app service Beluga, founded in 2010, was acquired by Meta a year later. Meta bought Beluga in the midst of the startup's fundraising process for an undisclosed sum. In buying Beluga, Facebook acquired the technology that eventually became the social media company's highly successful Messenger platform. In the process, Meta again expanded its offerings and eliminated a potential rival.
Facebook Diversity & Inclusiveness Transparency
As part of our effort to improve the awareness of the importance of diversity in companies, we have highlighted the transparency of Meta's commitment to diversity, inclusiveness, and social responsibility.
The below chart illustrates how Meta reports the diversity of its management and workforce. This shows if Meta discloses data about the diversity of its board of directors, C-Suite, general management, and employees overall, across a variety of markers. We have indicated that transparency with a ✔.
| Meta Diversity & Inclusiveness Reporting | |||||
|---|---|---|---|---|---|
| Race | Gender | Ability | Veteran Status | Sexual Orientation | |
| Board of Directors | |||||
| C-Suite | |||||
| General Management | ✔ (U.S. Only) | ✔ | |||
| Employees | ✔ (U.S. Only) | ✔ | |||
Article Sources
Investopedia requires writers to use primary sources to support their work.
These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate. You can learn more about the standards we follow in producing accurate, unbiased content in our editorial policy.
Meta Newsroom. "Introducing Meta: A Social Technology Company."
Facebook. "Facebook Reports Fourth Quarter and Full Year 2020 Results."
Facebook, Inc. "What are the Facebook Products?"
Reuters. "FTC demands data on small buys by Google, Amazon, Apple, Facebook, Microsoft,"
Facebook, Inc. "Facebook to Acquire Instagram,"
TechCrunch. "Right Before Acquisition, Instagram Closed $50M At A $500M Valuation From Sequoia, Thrive, Greylock And Benchmark,"
Facebook, Inc. "Facebook to Acquire Oculus,"
WhatsApp. "400 Million Stories,"
TechCrunch. "WhatsApp Was Valued At ~$1.
5B In Final Round Before Sale,"Fortune. "What the Surreal Vision acquisition means for Oculus,"
TechCrunch. "Facebook Buys Mobile Data Analytics Company Onavo, Reportedly For Up To $200M… And (Finally?) Gets Its Office In Israel,"
The Wall Street Journal. "Facebook’s Onavo Gives Social-Media Firm Inside Peek at Rivals’ Users,"
TechCrunch. "Facebook Acquires Group Messaging Service Beluga In A Talent AND Technology Deal,"
Instagram Ownership Explained: Who Owns Instagram, Exactly?
Who Owns Instagram?
Instagram is one of the world’s most popular social media apps, with 1.4 billion active global users. The platform allows users to share photos, graphic messages, and videos with friends and the rest of the world.
Aside from being a great way to stay connected with friends and family, Instagram is also a powerful marketing tool for businesses. Up to 60% of Instagram users use the platform to find new products.
This makes Instagram a valuable asset for any business looking to reach a wider audience.
Today, Instagram showcases several interesting features like Reels, Stories, Explore Page, and Highlights. For businesses, it also offers powerful marketing features like Sponsored Posts, Business Analytics Insights, Advertising Features, and Shop. You can also create and edit high-quality graphic content using the in-app camera features.
With all of these exciting features, you may be wondering, “Who are the brains behind this platform?” But before we answer that, here are some interesting facts about Instagram:
- Instagram gained popularity from its inception, with over 1 million users within the first two months.
- About 995 photos are uploaded on Instagram every second.
- 90% of Instagram users follow at least one brand.
- Instagram is the second most engaged social media app.
- 31.4% of American users are between 25 and 34 years old.
- The Stories feature has over 500 million users daily.
Who Invented Instagram?
Instagram was invented through the joint efforts of Kevin Systrom and Mike Krieger. Kevin Systrom, born on December 30, 1983 in San Francisco, California, is the son of the Vice President for HR at TJX Companies Inc. and a marketing executive at ZipCar. He studied science and engineering at Stanford University before becoming a Google marketing associate, then a product manager at a start-up, and eventually working with online communities.
Mike Krieger, from Sao Paulo, Brazil, was involved in a class project called “Send me some sunshine,” which was meant to help people in more sunny areas send pictures to those in gray areas to help with seasonal depression. He had no formal computer training but started learning to code while working at NextStop.
Krieger and Systrom met while working on a prototype called Burbn, which was similar to Facebook. Their love for Bourbon originally inspired the prototype.
Systrom and Krieger then found that the picture-sharing section was more popular and began a new project, using an Instagram prototype called Scotch.
They would later launch Instagram not long after, with the platform gaining 25,000 users on the first day.
When Did Instagram Launch?
After months of testing and development, Instagram made its big launch on October 6, 2010. The app quickly gained 1 million users three months after. This was a great success for the platform, given that Facebook reached 1 million users in 10 months, while Twitter took two years to achieve the same.
It didn’t stop there. In another six weeks, Instagram users hit 2 million. By August 3, 2011, the app had 150 million picture uploads. On September 11, Instagram introduced in-app camera adjustments and settings and a new icon. This coincided with the iPhone camera technology, and picture sharing spiraled the app to new heights.
They released the Android version on April 3, 2011, and the app reached 50 million users within the month. On June 20, 2013, Instagram launched video sharing, considering how visual content helps in shaping consumption on social media.
Who Owns Instagram Today?
Instagram’s quick success piqued the interest of Mark Zuckerberg, who started negotiations to gain Instagram as part of Facebook, Inc.
Part of his terms was to let Kevin Systrom, the CEO, control Instagram’s growth independently. Facebook, Inc. eventually bought out Instagram on April 9, 2012 for $1 billion in cash and stocks, despite Instagram having only 13 employees.
Kevin Systrom and Mike Krieger still maintained executive positions to oversee Instagram’s development and implementation at Facebook, Inc. The integration introduced features like video sharing, Instagram Direct Messaging, and Instagram broadcasts.
The two founders eventually left Facebook in 2019.
Other Platforms Meta Owns
Mark Zuckerberg, who has over 50% of the voting shares, continued to gain other software applications for Facebook, Inc. over the years. The conglomerate eventually created Meta Platforms, Inc, which is now the parent company of all Zuckerberg’s mergers and acquisitions.
After purchasing Instagram in 2012, Facebook acquired WhatsApp and Oculus Virtual Reality in 2014. Then, in 2019, Facebook bought Beat Games, the developer of Beat Saber. In 2022, Facebook bought 10% of Jia Platforms’ stocks, and, as a result, the company bought GIPHY for $400 million.
The company also tried to buy Twitter, but as the platform is publicly owned, it was difficult to implement Zuckerberg’s strategy with several private individuals and public entities. It also unsuccessfully tried to bring in TikTok, a platform owned by ByteDance. However, TikTok has risen to become Meta’s biggest competition.
Facebook officially changed its name to Meta last year and announced this during the Facebook Connect Conference in October 2021. The major apps under Meta are now Facebook, Facebook Messenger, WhatsApp, Workplace, and Instagram.
Key Takeaways
Instagram is now owned by Meta. It will be interesting to see if any changes are made to the Instagram ownership structure in the future and whether or not those changes benefit users and businesses alike.
Instagram is an incredibly powerful platform for product marketing. With its advanced analytics and ability to track KPIs, businesses can use the app to both sell and market their products with great success.
More than 890 million people open Instagram every day. Among them are ordinary users, celebrities, professionals and businessmen. For many, the network has become not just a platform for communication, but a tool for brand promotion. How much did the creators earn from their invention? nine0003
What is Instagram
Instagram was originally developed as a mobile application for sharing photos and videos, but with its growing popularity, it has acquired all the "chips" of a full-fledged social network.
The base of registered users of the service, according to RBC, reached 1.1 billion people in mid-June 2018. According to a study conducted by We Are Social and Hootsuite, the number of people who use Instagram daily at the beginning of 2019 was almost 89.5 million people.
Instagram is not an independent company - it exists just as a service. In April 2012, it was bought by Mark Zuckerberg's Facebook company. The current owner of Instagram paid about 1 billion USD for its acquisition.
Source: allbrands.markets
Zuckerberg owns more than 50% of the voting rights on Facebook. In addition, he holds the position of CEO and Chairman of the Board of Directors.
About the Creators of
Instagram is run by two people, Kevin Systrom and Mike Krieger. nine0003
Kevin Systrom graduated from Stanford University with a BA in Science and Technology Management. Kevin started as a programmer at Odeon, where he was selected for an internship among university scholarships.
This company later evolved into Twitter. Systrom then worked for Google Marketing where he helped develop Gmail and Google Reader.
Mike Krieger graduated from Stanford with a master's degree. Prior to joining the Instagram project, he worked for Meebo as a UI designer and Frontend developer. nine0003
Instagram: start
Photo: Krieger and Systrom. Source: Krieger's Instagram page
The future creators of the popular service worked together on the Burbn project. It was a geolocation network with the ability to process photos. Even then, they realized that people like the idea of sharing moments of their lives through photos.
In 2010, it was decided to collect all the photo processing features from Burbn and make a standalone application. It's called Instagram. At the beginning of October 2011, the developers placed it in the App Store, and it quickly became very popular. Already in the first year of its existence, Apple named Instagram the best application for the iPhone, according to techli.
com. nine0003
In 2011, the second version of the application appeared. Its feature is additional photo processing options - new filters, quick rotation, changing the angle of inclination. However, Instagram was still only available to iOS users.
The Android version appeared in 2012. As Kevin Systrom said then in an interview with The New York Times, after the advent of Instagram on Google Play, about 2 thousand people registered every minute.
Purchased by Facebook
Facebook announced its intention to acquire Instagram in April 2012. Systrom and Krieger were to receive $300 million in cash and 23 million Facebook shares. According to the terms of the agreement, the latter was obliged to pay a penalty in the amount of 200 million USD in case of failure of the transaction. However, everything went well, and Instagram became a division of Facebook.
The founders stayed in the project for a long time. Kevin Systrom was the chief executive of the service, while Michael Krieger led the engineering department.
They both left the company in 2018. nine0003
The RBC portal then wrote, citing the New York Times, that the founders had decided to leave due to the Facebook crisis. It flared up due to criticism of the social network for incorrect handling of user data.
Photo: Zuckerberg with Macron. Source: Mark's Instagram page
There is another point of view. According to Bloomberg, the creators of Instagram left the project due to disagreements with Mark Zuckerberg about the future of the service. The agency reported that the leader of Facebook began to show increased attention to the service. However, according to the agreements between him and the developers, they should be given complete freedom of action. nine0003
How much does Instagram cost?
So, the smartphone app has brought hundreds of millions of dollars to its developers. But was this purchase beneficial for Facebook? The acquisition of the service was a major deal for the social network, since at that time it spent no more than 100 million USD on acquisitions.
However, after that, Instagram managed to grow significantly. Facebook does not disclose information about the profits that individual divisions bring to it, including Instagram. But back in 2015, analysts at Bank of America Merrill Lynch (now Bank of America) estimated its value at $37 billion. Also, according to their calculations, the service could earn about 4 billion USD in revenue annually from advertising. nine0003
In 2016, according to Forbes, Instagram could already be worth up to 50 billion USD. Bloomberg in mid-2018 estimated the annual profit of the service at 10 billion USD, and the total cost at 100 billion USD.
Photo: pixabay./usa-reiseblogger
Will the service become independent
In May 2019, there were rumors about a possible separation of Instagram. The Russian newspaper then wrote that Mark Zuckerberg was urged to do this by Chris Hughes, one of the co-founders of Facebook. He proposed to break the company into 3 separate parts - the actual social network, the WhatsApp messenger and Instagram.
nine0003
Hughes cited Facebook's monopolization and the fact that Zuckerberg, as its leader, can influence private opinion as the reason. Earlier, the social network was accused of influencing the results of the US presidential election through selective display of campaign materials.
However, according to Interfax, Zuckerberg refused to take such a step. He acknowledged that Facebook has problems, including in terms of information security. But fragmentation, in his opinion, is impossible and pointless. Thus, he denied rumors that Instagram could soon become an independent company. nine0003
who is it and how did the popular social network
appear On July 17, 2010, in one of the cities of Mexico, Kevin Systrom saw a homeless dog hiding from the heat under a taco counter. The guy took a picture of the dog and uploaded the picture to the application, which in three months the whole world will recognize as Instagram. The Mexican dog did not know for sure that a large-scale insta-epoch would begin with his photo.
And Systrom himself did not expect that a billion people would download his application to smartphones.
The editors of MC.today tell who the creators of Instagram were and how the social network now lives without them. nine0003
First post on Instagram. Source
Who invented Instagram
By the age of 27, Kevin Systrom already had experience working at Google, Odeo (later the company became Twitter. - Note ed.) and the travel startup Nextstop.
He had no formal education as a programmer: he studied management at the university. But the guy independently mastered computer science at night and on weekends.
Kevin was interested in photography and saw the potential in sharing apps. There were already analogues on the market, for example Foursquare. But Systrom wanted to expand the functionality: indicate the geolocation on the photo, exchange messages, make appointments, and so on. Over time, this application became Burbn in 2010.
nine0003
At a party in Silicon Valley, Systrom showed two VCs from Baseline Ventures and Andreessen Horowitz a Burbn prototype. They became interested, and in the morning a business meeting took place. Within a week, these two funds invested $500 million in Systrom's project. And he himself quit Nextstop and focused on developing a startup.
A few months later, 25-year-old Mike Krieger joined the project. The guys met and became friends at Stanford University. Prior to that, Mike worked at the startup Meebo (messaging service. - Ed.) .
In search of the ideal: the first failures and victories
Burbn did not achieve much success. The app was difficult to use and the number of features was confusing. Systrom analyzed which of them people actually use. It turned out that most often just share photos. So Kevin and Mike decided to focus on photos taken with their phones. They refused other functions.
In Zigzag: An Amazing Path to More Creativity, R.
Keith Sawyer writes that after exploring the major photo-sharing apps, Kevin and Mike turned their attention to Hipstamatic and Facebook. Hipstamatic had cool filters, but it was difficult to share a photo in it. There were photos in the Facebook feed, but sharing them on the iPhone was not easy.
So Mike and Kevin decided to create something between Hipstamatic and Facebook. The guys have developed an easy-to-use application. It combined tools to improve grainy photos taken with early smartphones with a social feed to share them. nine0003
Mike Krieger and Kevin Systrom. Source
How Instagram was launched
After months of experimentation and prototyping, in October 2010 Systrom and Krieger launched an improved photo-sharing app. And they renamed it from Burbn to Instagram.
“Burbn was a false start. All the best companies in the world had predecessors. YouTube was a dating site. You always have to evolve into something else.
” – said Systrom at a later conference in 2012.
In fact, Kevin and Mike have given people what everyone has been waiting for: the ability to share edited photos. It was a victory. In the first day after launch, Instagram already had 25,000 users. Within the first week, it was downloaded 100,000 times. And by mid-December, the number of downloads reached a million.
“I realized the success of Instagram after my parents started using it” – spoke Kevin.
The number of users grew rapidly, so the programmers worked hard. The guys even had to use Amazon servers, as their own could not withstand the load.
Forbes cover with Kevin Systrom, August 20, 2012 issue. Source
Technology and business publications wrote about the founders. This increase in popularity and media interest has led to the fact that investors themselves began to pay attention to the startup.
In February 2011, $7 million was invested in it. One of the Benchmark Capital investors then valued the company at about $25 million.
In addition to institutional investors, the company has attracted the attention of other IT companies, including Twitter and Facebook.
Systrom knew Jack Dorsey when he was at Odeo. Dorsey offered about $500 million for the app, but Systrom refused. He wanted to develop the company on his own.
Why Facebook decided to buy a startup
Mike Krieger, Mark Zuckerberg and Kevin Systrom. Source
At the same time, Facebook founder Mark Zuckerberg was eyeing Instagram. At some point, he realized that in addition to money, Systrom needed independence. nine0003
In 2012, Facebook bought Instagram for $1 billion in cash and stock. It was a huge amount for a company with only 12 employees.
The Instagram team before Facebook bought the company. Source
At that time the project did not earn anything.
With this deal, the founders of Instagram seemed to be killing two birds with one stone: they get money and the freedom to develop the application at their discretion. And Systrom agreed.
“Zuckerberg promised me he would let us run Instagram as a separate company” – spoke Kevin Systrom.
Thanks to Facebook's investment, Mike and Kevin no longer had to worry about money. Therefore, they focused on the development of Instagram: they added new filters, launched stories, live broadcasts and their own version of television - IGTV. After the shareholders of Facebook began to express dissatisfaction with the fact that Instagram does not earn money, a tool for displaying ads was created in the application.
But as the network grew, so did disagreements with Zuckerberg about its future. And in 2018, Instagram founder Kevin Systrom and his partner Mike Krieger left the company. In their statement, they wrote that they wanted to take a break and create something new.
nine0003
“Creating something new requires us to take a step back, understand what inspires us and match it with the needs of the world; this is what we plan to do,” Kevin said on .
Instagram in numbers today
Now Instagram is much more than a photo-sharing platform. The company has launched many features that help brands promote and sell products directly from the app. Bloggers make thousands of dollars online. nine0003
Here are some numbers from today's life of the social network:
- More than a billion people use the application every month.
- On average, each user spends about 30 minutes a day on Instagram.
- 500 million people watch stories every day.
- Even though Instagram is accessed primarily through the mobile app, it still ranks among the top 10 most visited websites.
