Here’s a very gossipy tale about why Instagram ended up at Facebook from Jennifer Van Grove at VentureBeat.
Van Grove says Instagram had an offer from Twitter to buy the company for hundreds of millions of dollars. Instagram CEO Kevin Systrom declined the offer, but used it as a way to get Facebook CEO Mark Zuckerberg to pay $1 billion for the photo-sharing startup.
According to Van Grove, Jack Dorsey was actively driving the negotiations with Instagram.
When Twitter was trying to buy Instagram, Systrom was also in the process of raising a new round of funding. After Instagram closed its round of funding, it suddenly had a fresh pile of cash and an offer from Twitter.
Van Grove says Systrom went to Zuckerberg looking for a better deal than what Twitter offered.
This is a slight variation from how the story has been told. According to The Wall Street Journal, Zuckerberg called Systrom, not the other way around.
Van Grove also reports that the primary reason Mark Zuckerberg bought Instagram was “paranoia.”
She writes: “Zuckerberg, we’re told, lives in perpetual anxiety, preoccupied by the fear of Facebook losing its place, terrified that youngsters will get their social networking fix from other services. That fear served as the catalyst behind his decision to buy Instagram and keep it out of the hands of a cross-town competitor.”
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