Facebook 'eyeing future of social networking' with Instagram buy

Facebook is to spend $1bn (€762m) to buy the photo-sharing software company Instagram.

The deal comes days after the service began offering a version for Android phones. The payment will be in cash and Facebook stock.

Digital Editor with the Sunday Business Post Adrian Weckler says Facebook has its eye on the future of social networking.

"The big question is why on earth would Facebook pay $1bn for something that is completely free," Mr Weckler commented.

"The answer to that is really that photos are now at the core of what social networking is.

"Facebook doesn't want an app that can show off photo-sharing functionality - Facebook wants Instagram because photo-sharing is social networking."

Facebook is expected to complete its initial public offering of stock next month.

The acquisition of Instagram is Facebook's largest to date.

Instagram lets people apply filters to photos they take with their mobile devices. Some make the photos look as if they were taken in the 1970s or on Polaroid cameras.

Facebook says it will keep Instagram running independently. Users will be able to run it on rival social networks such as Twitter – a departure from Facebook’s tendency to buy small start-ups and integrate the technology – or shut it down.

The deal is expected to close by the end of June.