Critical.
Authoritative.
Strategic.
Subscribe to CIO Magazine »

Facebook's Instagram buy could be delayed by FTC, report says

The probe is a routine antitrust investigation

The U.S. Federal Trade Commission has launched a probe of Facebook's proposed acquisition of Instagram that could delay the closing of the deal, the Financial Times reported Thursday.

Most mergers valued at more than $66 million must be reported to the FTC, and preliminary reviews by the agency are common. But the investigation of Facebook for any competition issues could upset its plans to close the deal by the end of the second quarter, the FT reported.

Maxwell Blecher, an antitrust attorney with Blecher & Collins, said an antitrust probe would likely take at least a month.

"If they go into it further and they issue additional requests for information, that could probably take up to six months," he told IDG News Service.

The FTC has already collected information from at least two of Facebook's largest competitors, according to the FT report, which cited unnamed sources. Facebook will not be able to integrate Instagram's service with its social networking platform before the deal is finalized, the FT said.

That delay could hurt Facebook's efforts to strengthen its mobile strategy. Facebook's has said in regulatory filings that its revenue will suffer as users increasingly access its service from mobile devices rather than PCs.

The increase in mobile usage has resulted in its daily user base expanding more quickly than the number of advertisements it delivers, Facebook said in amended S-1 filing with the Securities and Exchange Commission Wednesday.

"If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected," the filing states.

Facebook announced last month that it planned to buy Instagram for about $1 billion in cash and stock. Competition experts believe the deal will ultimately be approved, the FT reported.

Join the CIO Australia group on LinkedIn. The group is open to CIOs, IT Directors, COOs, CTOs and senior IT managers.

More about: Facebook, Federal Trade Commission, FTC, IDG, Securities and Exchange Commission
References show all
Comments are now closed.
Related Whitepapers
Latest Stories
Community Comments
Latest Blog Posts
Whitepapers
  • Facebook Graph Search POV
    A description and analysis of Facebook Social Graph, monetization opportunities and its value to businesses.
    Learn more »
  • Smarter Data Centre Outsourcing: Considerations for CFOs
    Deloitte explores the business and finance implications associated with managing data centres. This paper outlines the options available to structure an organisations data centre and complementary IT services and provides the key considerations that need to be reviewed when determining which option works best for them.
    Learn more »
  • Rebranded Quadmark revamps its IT solutions with Google Apps
    The Singapore office was using Exchange as its email server but encountered various issues such as storage capacity limitations and difficulty in managing spam. Adding new users to the server was also a hassle that often required a third party vendor, resulting in a waste of time and resources. Quadmark also experienced email performance issues that slowed down their employees’ response time, leading to frustration among staff and clients. Quadmark’s management felt that it was unacceptable to continue it’s current solution and thus decided to streamline its IT infrastructure alongside its rebranding plans. The business wanted a unified and consolidated email service for its various offices. Quadmark also wanted to be able to house files and documents on the cloud.
    Learn more »
All whitepapers
rhs_login_lockGet exclusive access to Invitation only events CIO, reports & analysis.
Latest Jobs
Salary Calculator

Supplied by

View the full Peoplebank ICT Salary & Employment Index

Recent comments

Computerworld
ARN
Techworld
CMO