Facebook Instagram Acquisition May Not Be So Instant

Facebook is facing a US Federal Trade Commission (FTC) investigation over its Instagram acquisition, which could seriously delay the $1 billion deal, according to a report.

The Instagram acquisition may not be done by the end of 2012, a report in the Financial Times suggested, citing two people familiar with the matter as its sources.

Facebook had hoped to complete the acquisition by the end of the second quarter, but the FTC probe could take it beyond that time. Such an investigation is par for the course on deals over $68.2 million.

Google and Twitter contact

According to the sources, Google and Twitter have already been contacted by the FTC. According to a report in the New York Times last month, Twitter had expressed an interest in acquiring Instagram.

“They’re going to want to take some months to investigate and understand the market and other players,” Mark Lemley, a professor at Stanford Law School, told the FT. “And there may be more parties with an interest in submitting information.”

Facebook is currently preparing for an IPO, which is reportedly oversubscribed already, as a source revealed to Reuters that there is demand for more shares than Facebook has available. Mark Zuckerburg and other Facebook executives are currently travelling the US on their pre-IPO roadshow.

Facebook is hoping to raise around $10.6 billion by selling off a small portion of the company, but the company is having to deal with reports of slowing growth and issues with its mobile segment. In what some saw as a profit warning, the social network has warned that the number of users accessing the site over mobile devices was growing faster than revenues from mobiles, as Facebook had not developed its mobile ad strategy adequately.

The company looked to counter its mobile troubles with the launch of its App Center earlier this week, offering its members an application hub from which to find apps for the social network on the web and on iOS and Android apps. It is “designed to grow mobile apps that use Facebook – whether they’re on iOS, Android or the mobile web,” Facebook said.

But the Instagram deal, which will form a major part of Facebook’s mobile strategy, may not produce fruits as soon as Zuckerburg would have liked.

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