San Jose Mercury News (MCT)
POSTED: 08:54 a.m. HST, May 24, 2012
SAN JOSE, Calif. >> Less than two months after agreeing to pay about $1 billion for photo-sharing application Instagram, Facebook Inc. introduced a similar app Thursday.
Facebook began offering Facebook Camera as a free app for devices using Apple Inc.’s iOS mobile operating system. The software offers features similar to Instagram’s, including several filters that change the appearance of photos and the ability to share pictures with friends separately from Facebook’s main ecosystem.
Facebook agreed to acquire San Francisco-based Instagram on April 9 for cash and stock then valued at $1 billion, but the value of the stock has widely varied after the Menlo Park, Calif., social network went public last week and has experienced volatility on Wall Street. The deal has not closed, and Facebook recently changed wording in its Securities and Exchange Commission filings to indicate it did not expect the acquisition to be complete in the current quarter. If the deal does not go through, Facebook will owe Instagram $200 million, according to the companies’ agreement.
Facebook CEO Mark Zuckerberg said at the time that Instagram would continue to function as a separate entity after the acquisition, so the introduction of Facebook Photos would create a competitor from Facebook’s side.
Instagram launched just two years ago, but quickly found fans on iOS devices. It launched its Android app just a week before the Facebook deal and instantly increased its user base by 30 percent, according to reports. Facebook did not mention an Android version of Facebook Camera in its blog post announcing the new app.
Facebook Camera is not the first independent app the world’s most popular social network has introduced. The company also offers Facebook Messages for mobile devices, allowing users to communicate with friends without entering Facebook’s primary mobile app.
Facebook has struggled to find a stable stock price since exercising a record-breaking initial public offering last week.