Home News Business Microsoft, Facebook announce billion-dollar deals

Microsoft, Facebook announce billion-dollar deals

USA: Monday (April 9, 2012) was the day of megadeals. At the one end, Facebook announced that it will acquire the mobile photo-sharing firm Instagram, which has an easy-to-use geotag feature in its photo-sharing process that lets users tell everyone exactly where they were when they took their photos. The deal, Facebook’s largest to date, is worth around USD 1 billion in cash and shares.

At another end, AOL sold 800 patents for USD 1.1 billion to Microsoft. The patents are related to mapping, advertising, search, content generation/management, social networking, multimedia/streaming and security, among other things.

More about Facebook’s deal:
The transaction is expected to close later this quarter. “It is the first time we have ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all,” Facebook chief executive Mark Zuckerberg wrote on his Facebook page.

The shift toward mobile has proven problematic for Facebook, which admitted in February that its decision not to put display ads on its mobile applications has made it difficult to generate revenue on that platform. Facebook has since put some ads in the news feeds of its mobile users. Instagram, meanwhile, estimates that its users upload around 5 million photos through mobile devices to its service each day. The service has been a hit since its launch in 2010, and was named Apple’s top app last year.

Meanwhile, experts expressed concerns that the acquisition would have a bad effect on the Instagram service. In the past few years, Facebook has bought up several companies but then raided the firms for their talent while shuttering their services, such as the location-based check-in service Gowalla, group messaging application Beluga and live-event service Hot Potato.

Yet both Facebook and Instagram were careful to say in statements that this deal was different, and that the photo-sharing app would continue to develop with some degree of independence.

More about Microsoft’s deal:
The deal is good for both parties and the patent auction was apparently competitive, according to Microsoft. But, a ZDNet report observed that there is web mapping war going on. In addition, the report listed some facts:
– Wikipedia, Foursquare and Apple pulled back from Google Maps for OpenStreetMap, an open competitor to Google on mapping technology.
– Mapquest is a backer of the OpenStreetMap initiative and has provided tilesets, APIs and other tools.
– 239 patents are attributed to Mapquest at the U.S. Patent and Trademark Office. Rest assured some of those will be transferred to Microsoft in the AOL patent deal.

Source: Washington Post & TechCrunch