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Instagram wanted $2bn from Facebook, says report

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Instagram originally demanded an acquisition fee of $2 billion (£1.25bn) from Facebook, new reports suggest.

The social network's CEO Mark Zuckerberg is said to have talked down his Instagram counterpart Kevin Systrom by offering him a 1% share in his company, according to The Wall Street Journal.

Instagram for Android screenshot - First Run

© Instagram

Facebook CEO Mark Zuckerberg talks about Timeline during the f/8 conference

© PA Images



Facebook bought out the photo-sharing service in a deal worth $1 billion (£629m) after Zuckerberg assured Systrom that the social network will one day be worth $200 billion, with a 1% share yielding $2 billion.

"Mr Zuckerberg, who planned to pay for Instagram mostly with stock, asked Mr Systrom what he thought Facebook would be worth," the report states.

"If he believed Facebook would one day be worth as much as a company like Google at $200 billion (£124bn) or more, then the equivalent of 1% of Facebook would be sufficient to meet his price, Mr Zuckerberg told Mr Systrom."

Following Facebook's acquisition of Instagram, reports emerged that microblogging website Twitter previously launched a bid to buy out the company.

Zuckerberg has pledged to keep Instagram running as an autonomous operation.

> Facebook's Instagram deal ignites fears of new tech bubble

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