Zuckerberg did Instagram deal by himself, whittled Systrom down from $2 billion

zuckerberg via LA TimesIt’s not certain what’s more remarkable — that Instagram CEO Kevin Systrom reportedly asked for two billion dollars for his photo-sharing company when negotiating with Facebook boss Mark Zuckerberg earlier this month, or that Zuckerberg did the deal all by himself, apparently without the knowledge of his board.

Many in the tech community were surprised enough that Facebook bought the start-up for one billion dollars — this is a company which has just 13 employees, launched less than two years ago and is yet to turn a profit, after all. Two billion and people would have been spurting their coffee out all over the place on hearing the news.

‘Told, not consulted’

According to a Wall Street Journal report on Tuesday, the first the Facebook board knew of Zuckerberg’s intention to acquire the company behind the incredibly popular Instagram app was on April 8 — when he contacted them by email to say that an agreement was about to be signed. Indeed, according to one person in the know, the Facebook board “was told, not consulted.”

Hours later, Zuckerberg had sealed the deal on what became the social networking company’s biggest ever acquisition.

In negotiations which reportedly took place over three days at Zuckerberg’s Palo Alto home, the Facebook co-founder negotiated with Systrom, trying to persuade the Instagram boss to accept $1 billion — half of Systrom’s original asking price.

instafacebook

As the WSJ points out, for deals of this magnitude, companies usually bring in teams of lawyers and bankers to pore over contracts in the lead up to a possible deal being struck — a process that can sometimes take weeks, if not longer.

People familiar with the matter told the WSJ that Zuckerberg was worried that had he approached Systrom with a team of lawyers, the Instagram boss may have been turned off the deal. In the end, Zuckerberg pretty much sorted the whole thing by himself, although in the latter stages Facebook’s director of corporate development, Amin Zoufonoun, was said to have lent a hand.

Lightning speed

Zuckerberg was able to do things by himself, and move at lightning speed, mainly because he owns 28 percent of Facebook’s stock and controls 57 percent of its voting rights. Systrom is in a similar position, owning 45 percent of his company.

The speed of the deal was likely down to Zuckerberg’s fear that another company might make a move on Instagram, a company he wanted because of its popularity with the mobile community — an area in which Facebook has been having less success — and because it needed a decent imaging client.

Android

Two days before Zuckerberg approached Systrom, Instagram released a long-awaited version for Android-powered devices. Millions more users downloaded the free retro-styling photo app within days, adding to the already enormous iOS user base and taking it beyond the 30 million mark. Unable to wait any longer, Zuckerberg got on the phone and invited Systrom to his place.

After three days of talks, the deal was done. A somewhat comical touch to the proceedings came when, according to the WSJ, Facebook board member Marc Andreessen turned up at Zuckerberg’s house for their usual meeting. Andreessen, who invested in Instagram in its early days, had no idea Systrom was in another room — until he walked in on his meeting with Zuckerberg. No doubt the Facebook CEO had to lift Andreessen’s jaw off the floor and help him return it to its original position.

The WSJ said that while Facebook’s board did actually vote on the deal, it was simply a case of going through the motions.

Social Media

Instagram feature that lets you reshare others’ posts may be on its way

Facebook has always offered the "share" button for content you want to repost, while Twitter has the retweet button. But, despite constant calls from many of its billion-plus users, Instagram has always refused to offer such an option…
News

Lucid Motors accepts $1 billion investment from Saudi Arabian fund

The Public Investment Fund of Saudi Arabia will invest $1 billion in upstart electric car company Lucid Motors. Lucid hopes to launch a Tesla-fighting luxury sedan called the Air by 2020.
Gaming

Games with Gold and Spotlight Sale bring big price drops on Xbox-exclusive games

It's that time of the month when Microsoft updates their Games with Gold deals and adds new titles to their Spotlight Sale. Here's our list of the best Games with Gold deals available right now for the Xbox One.
Emerging Tech

Giant NASA space laser satellite to gauge impact of climate change on ice sheets

NASA has launched its most advanced space laser satellite in history as part of a $1 billion mission to reveal how climate change has been affecting the Earth’s ice sheet surface elevation.
Home Theater

Google Chromecast and Chromecast Ultra: Everything you need to know

Google's Chromecast plugs into your TV's HDMI port, allowing you to stream content from your tablet, laptop, or smartphone directly to your TV. Here's what you need to know about all iterations, including the 4K-ready Chromecast Ultra.
Mobile

Samsung looks to Huawei for inspiration, and the new Galaxy A7 is born

Samsung has launched the Galaxy A7 smartphone, its first with a triple-lens rear camera, which, although sounds similar to the one fitted to the Huawei P20 Pro, works in a different way.
Smart Home

Voice technology is useful, in demand, and not moving fast enough

A new survey commissioned by IT analytics firm AppDynamics indicates that enterprise companies aren't adopting advances in voice technology fast enough to keep up with demand, especially from millennials.
Mobile

The Huawei Mate 20 Pro's body may wirelessly charge new Bluetooth headphones

Huawei is no stranger when it comes to big phones. And this year it plans to go even bigger with the Huawei Mate 20 and Mate 20 Pro. Here's what we think we know about the new range.
Mobile

88 percent of the $800-plus smartphones sold last quarter were iPhones

Apple may not sell as many smartphones as Samsung overall, but according to a new report that varies depending on price. The company sold 43 percent of all smartphones over $400, and 88 percent of those over $800 last quarter.
Mobile

How to clean your iPhone’s charging port

What happens when your iPhone charger doesn't work? It's time to look at the charging port. Here's how to clean your iPhone's charging port: We'll go over the most successful methods and the safety tips you need to know.
Mobile

Which new iPhone is the best? iPhone XS vs. iPhone XS Max vs. iPhone XR

Apple has three new iPhone models to choose from this year, making the choice a little harder than usual. What's the difference between the iPhone XS, the iPhone XS Max, and the iPhone XR, and which is best?
Mobile

Here's the Samsung Galaxy S9's new Android 9.0 Pie interface

The Samsung Galaxy S9 and Galaxy S9 Plus are here. The flagship devices boast some awesome new features and a powerful new processor. Here's everything you need to know about these Samsung phones.
Photography

Joby’s tiny tripods double as selfie sticks and hide four different modes

The Joby TelePod models are more than just compact tripods -- they also double as hand grips, selfie sticks, and tabletop tripods. Designed to accommodate smaller gear like smartphones and lightweight mirrorless, the tripods use a unique…
Wearables

WatchOS 5 comes with tons of new features -- here are our favorites

Months after Apple announced its latest software at WWDC, you can now download WatchOS for the Apple Watch. WatchOS 5 brings a number of new features including new watch faces and improved health tracking.