Zuckerberg hands over $1billion to buy Instagram

Facebook boss Mark Zuckerberg hands over $1billion to buy Instagram The 13 employees of photo-sharing service Instagram were celebrating last night after learning they are set to become multi-millionaires following the company\'s $1billion takeover by Facebook. Kevin Systrom, the 26-year-old CEO of the San-Francisco based photo-sharing service, which was started just 15 months ago, will net an estimated $400 million while co-founder Mike Krieger, who holds a 10 per cent stake, and will earn around $100 million.
Now a source close to the company has revealed that a further 10 per cent stake, equating to $100million will be shared out among the firm\'s 13 employees.
Instagram allows users to customise photos by adding special effects or tints before quickly uploading them onto a variety of social-networking sites.
However many users have accused the service of \'selling out\' and have raised concerns that Facebook will now use their personal data bombard them with adverts.
Mr Zuckerburg has promised to build on the Instagram\'s existing features rather than simply integrate them into Facebook.
And he promised to keep Instagram running as an independent program so it will still be able to be used on rival social networks, such as Twitter.
He said: \'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. We don\'t plan on doing many more of these, 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.
‘We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience.\'
The deal comes just days after the service began offering a version for Android phones in addition to its popular Apple app.
Interestingly, it also comes eight years after one of the service\'s co-founders, Kevin Systrom, turned down Mark Zuckerberg\'s offer to join the Facebook team in 2004 - before it shot to success.
They first met after Zuckerberg moved to Silicon Valley in San Fransisco, near to where Systrom went to university at Stanford, he said in a 2011 interview with Fast Company.
Systrom, who was working on a photo sharing tool, said: \'When I met Adam and Mark, they were like, \"Yeah, we\'re working on some photo stuff too, why don\'t you come talk to us about Facebook?\"\'
He added: \'Unfortunately, I decided I wanted to stay in school, and that\'s one of those decisions that I look back at - I would\'ve loved to have been part of Facebook\'s growth over the years.\'
But it appears he hasn\'t been too hurt by the decision to finish his studies; he is now revelling in his own success, along with fellow founder Mike Krieger.
\'Everyone has their Facebook story, so I won\'t say that\'s necessarily unique,\' Systrom continued.
\'But being at Stanford, I was given the opportunity to be in the middle of a ton of innovation, and meet some of the smartest people... When I finally did it [myself], it just felt so right.\'
Facebook has had a tendency to buy small startups and integrate the technology - or shut it down altogether.
One thing is certain, Instagram\'s 26-year-old co-founders, Kevin Systrom and and Mike Krieger, have now joined the leagues of the super-rich.
Both are Stanford graduates, yet did not meet at university. Instead, their paths crossed after Systromm, who had worked for Google\'s Gmail and a start-up that went on to become Twitter, created a photo sharing app called Burbn.
Krieger was an early Burbn user and reached out to the creator.
As the CEO, Systrom is the more vocal of the duo, appearing as the face of the company to laud the application\'s simplicity and sociability.
Throughout university, he developed two main interests - food and photography - with his Facebook profile boasting evidence of both.
Yet it was the photography angle he chose to develop, creating services that made photo sharking easier, even as just an 18-year-old undergraduate.
But he has not entirely abandoned his love of food, taking photographs of long cooking sessions, enjoying a recent dinner with British chef Jamie Oliver, and admitting on Facebook that \'champagne\' is one of his favourite things (and he\'ll be able to afford a few extra bottles now).
Both men\'s profiles hint that they enjoy the finer things in life - Systrom, who was in fraternity Sigma Nu while at university, listing bowties and corduroy among his interests, while Krieger is pictured alongside vintage cars - and during a recent meeting with Michelle Obama.
And now the co-founders will be able treat themselves - as will the venture capital firm Benchmark Capital who invested early and now owns an extremely lucrative portion of the company.
The Stanford graduates met each when Systrom, then working for Google, set up a photo sharing service Burbn. Krieger was a fan. Fifteen months ago they founded Instagram.
On the company blog, Systrom wrote how he and his team are \'psyched\' about the deal.
He also reassured users that Facebook would not stop the Instagram app - instead it will continue to exist independently of Facebook.
\'Instagram is not going away,\' he wrote. \'We’ll be working with Facebook to evolve Instagram and build the network.
\'We’ll continue to add new features to the product and find new ways to create a better mobile photos experience. The Instagram app will still be the same one you know and love.
\'We’re psyched to be joining Facebook and are excited to build a better Instagram for everyone.\'
The duo will be sharing their windfall with a few key investors. According to the Wall Street Journal, in early 2011 the start up raised $7million from venture capital firm Benchmark Capital, which valued the company at about $25 million.
That means Benchmark roughly owned a quarter on Instagram. Benchmark also has a firm member on the Instagram board that approved the sale to Facebook. The VC firm has invested in other tech companies like Twitter and GrubHub.