The social network Facebook, flush with cash as the company steers toward public trading, Monday scooped up the Instagram mobile photo-sharing application for about $1 billion in cash and stock.
"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," said Facebook chief Mark Zuckerberg, in a statement posted on Facebook.
San Francisco-based Instagram, with more than 30 million users, is one of the most popular free photo-sharing application on Apple's App store.
Facebook had about 3.9 billion dollars in cash on hand at the end of 2011, according to CNN Money which cited registration documents.
Facebook is expected to launch its long-awaited Initial Public Offering (IPO) in May, when it aims to raise 5 billion dollars by selling some shares to the public. Recent sales of its shares on secondary markets have valued the company at between 93 billion dollars and 98 billion dollars.
The company has roughly 845 million active users around the world, and made a profit of around 1 billion dollars in 2011 on revenue of 3.71 billion dollars.
In his remarks on Facebook, Zuckerberg said the company did not "plan on doing many more of these (acquisitions), if any at all."
"But providing the best photo sharing experience is one reason why so many people love Facebook and we knew it would be worth bringing these two companies together," he said.
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