Facebook last night announced a billion-dollar-deal to buy the startup behind the popular smartphone photo sharing application Instagram.
The deal was seen by some as a move by Facebook to strengthen defences against Google and newcomer Pinterest in the weeks ahead of what promises to be a history making stock market debut.
An Instagram application for Apple's iPhones, iPads, and iPod touch devices has been downloaded over 30 million times since the first version was released in late 2010 by the firm.
A version of the application tailored for smartphones power by Google-backed Android software racked up more than a million users in the 24 hours after its release last week.
The free mini-programme lets people give classic looks to square photos using "filters" and then share them at Twitter, Facebook or other social networks. Apple crowned Instagram its app-of-the-year for 2011.
"For years, we've focused on building the best experience for sharing photos with your friends and family," Facebook co-founder Mark Zuckerberg said in announcing the deal. "Now, we'll be able to work even more closely with the Instagram team to also offer the best experiences for sharing beautiful mobile photos with people based on your interests," he added.
Zuckerberg called the acquisition "an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users" but promised it was a rare acquisition.
Facebook in February filed for a stock offering and could raise as much as $10 billion in the largest flotation ever by an Internet company on Wall Street. Facebook - the leading social network in all but six countries, notably China and Russia - claims more than 845 million users. Its value has been estimated at between $75 billion and $100 billion.
Facebook likely wanted to keep Instagram out of the hands of rivals such as Google while at the same time ramping up mobile offerings as people increasingly weave smartphones and tablet computers into lifestyles, according to analysts.