I love that companies like Instagram are happy to share this kind of information. I don't have the problem of scaling yet, but it's reassuring to know that when I do, there are good models like this one to follow.
The Instagram founders are exceptionally cool. After the $1B Facebook acquisition Mike Krieger kept right on answering questions on the instagram-api mailing list without missing a beat, as if nothing had happened.
I might be wrong, but as far as I know they haven't sold yet (it's still got to clear regulators?) so although he technically could have walked away I don't think it would been sensible as he isn't going to be able to cash out yet?
Some sources (the NY Post for example) say the deal may take up to 6 months with a 50% chance of going through. There's some concerns as to whether Instagram may prevent sharing with social networks other than facebook (flickr for e.g.). I'm already booted off instagram without upgrading to the new app, but fear that I'll be forced to share all my instagram pictures on my facebook timeline.
To prevent sharing out except to Facebook, Instagram would have to disable its API and stop saving photos to Camera Roll. I don't expect either of those to happen.
Even if the deal might fall through, I could easily imagine Mike taking a day or two to celebrate instead of jumping back in and answering questions, particularly on the instagram-api list, since nurturing a slowly-growing ecosystem is not Instagram's best path to a successful exit. Logically, I think he did it because he's a nice guy.
Its essentially a retainer. What if they go through the motions, and then Facebook backs out at the last second? It could have thrown Instagram for a loop, and sometimes an acquisition takes enough resources that it could cost the company money or disrupt their growth or operation. It essentially could prevent frivolous offers from "attacking" competitors by pretending to buy them out, and then not.
I imagine it's not US corporate law per se, but rather that as part of the agreement, even if the merger isn't cleared, FB still has to pay the $200m although at roughly 20% of the fee it seems a little steep to compensate Instagram for the cost of having to reverse the transaction (not that I'm particularly familiar with the deal terms and associated costs!)
It's not a matter of law. It's a "breakup fee" negotiated by Instagram in the event that the acquisition falls through.
The purpose of a breakup fee is to compensate the target for costs associated with the failed acquisition and various other losses or expenses. Mostly however, a breakup fee compensates the target for business oppportunities not pursued while the acquisition was being attempted because of the acquisition.
In cases where the acquirer is a direct competitor to the target, the breakup fee guarantees that the acquirer can't simply look at the target's books and assets, walk away, and use that knowledge to clone the target's business, without paying for it.
Don't forget to copy it locally, in case they (or their acquirers...) ever take it down. The Evernote web-clipper plugin is great for that.
I also did the same with all the folks who posted technical details on their experience dealing with the AWS outage. Great stuff to hold on to for future reference.
Comments
I love that companies like Instagram are happy to share this kind of information. I don't have the problem of scaling yet, but it's reassuring to know that when I do, there are good models like this one to follow.
The Instagram founders are exceptionally cool. After the $1B Facebook acquisition Mike Krieger kept right on answering questions on the instagram-api mailing list without missing a beat, as if nothing had happened.
Mike has been an example of good citizenship in the Redis community as well. Always helpful, kind, and providing important feedbacks.
I might be wrong, but as far as I know they haven't sold yet (it's still got to clear regulators?) so although he technically could have walked away I don't think it would been sensible as he isn't going to be able to cash out yet?
Some sources (the NY Post for example) say the deal may take up to 6 months with a 50% chance of going through. There's some concerns as to whether Instagram may prevent sharing with social networks other than facebook (flickr for e.g.). I'm already booted off instagram without upgrading to the new app, but fear that I'll be forced to share all my instagram pictures on my facebook timeline.
To prevent sharing out except to Facebook, Instagram would have to disable its API and stop saving photos to Camera Roll. I don't expect either of those to happen.
Even if the deal might fall through, I could easily imagine Mike taking a day or two to celebrate instead of jumping back in and answering questions, particularly on the instagram-api list, since nurturing a slowly-growing ecosystem is not Instagram's best path to a successful exit. Logically, I think he did it because he's a nice guy.
Also worth mention a post than Donna Kline penned: http://www.donnaklinenow.com/investigation/instagram-scam
Indeed - it hasn't cleared, and if it doesn't Facebook still owes them $200 million for the failed buy.
excuse my ignorance of US corporate law, but why would FB owe them $200M for a failed buy?
Its essentially a retainer. What if they go through the motions, and then Facebook backs out at the last second? It could have thrown Instagram for a loop, and sometimes an acquisition takes enough resources that it could cost the company money or disrupt their growth or operation. It essentially could prevent frivolous offers from "attacking" competitors by pretending to buy them out, and then not.
I guess you could call it "attempted merger".
I imagine it's not US corporate law per se, but rather that as part of the agreement, even if the merger isn't cleared, FB still has to pay the $200m although at roughly 20% of the fee it seems a little steep to compensate Instagram for the cost of having to reverse the transaction (not that I'm particularly familiar with the deal terms and associated costs!)
It's fairly common in acquisitions for one or both sides to agree to a "break-up" fee to protect against one side getting cold feet, regulatory risks, financing risks, and more. http://blogs.wsj.com/deals/2012/04/25/facebook-ipo-whats-wit...
It's not a matter of law. It's a "breakup fee" negotiated by Instagram in the event that the acquisition falls through.
The purpose of a breakup fee is to compensate the target for costs associated with the failed acquisition and various other losses or expenses. Mostly however, a breakup fee compensates the target for business oppportunities not pursued while the acquisition was being attempted because of the acquisition.
In cases where the acquirer is a direct competitor to the target, the breakup fee guarantees that the acquirer can't simply look at the target's books and assets, walk away, and use that knowledge to clone the target's business, without paying for it.
Meant to upvote, fat-finger downvoted instead. My bad. Hopefully someone can compensate.
Solid copy!
Don't forget to copy it locally, in case they (or their acquirers...) ever take it down. The Evernote web-clipper plugin is great for that.
I also did the same with all the folks who posted technical details on their experience dealing with the AWS outage. Great stuff to hold on to for future reference.