FTC probe may delay close of Facebook-Instagram deal

Facebook buys Instagram On April 9, Facebook CEO Mark Zuckerberg announced that the social network planned to acquire Instagram, the popular photo-sharing mobile app. It was later reported the deal was for a whopping $1 billion. Facebook's purchase of Instagram was finalized in September for $715.3 million -- $300 million of it in cash and the rest in stock. Facebook/Instagram

CBS/Facebook, Instagram

(CNET) The government's probe into Facebook's $1 billion purchase of photo-sharing app Instagram threatens to delay the close of the deal, according to a report in the Financial Times. That could prove distracting while the social-network company is deep into its initial public offering (IPO) roadshow.

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Citing two people familiar with the matter, the FT says the Federal Trade Commission has begun collecting information from two of Facebook's largest competitors - presumably Twitter and Google, although the newspaper doesn't say.

Such a probe is routine for any deal of this size, but the FT says this investigation could take six to 12 months. Facebook's S-1 IPO documents say that the company expects to the to close this quarter. It's unclear what such a delay would mean - both for Facebook's still nascent mobile strategy and potentially for the IPO itself.

A Facebook spokesman declined to comment.

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    Paul Sloan has been a San Francisco-based correspondent for Fortune magazine, an editor-at-large for Business 2.0 magazine, and a senior producer for CNN. He's now an executive editor at CNET News. When his fingers aren't on a keyboard, they're usually on a guitar. Email him here.

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