Facebook’s $1bn acquisition of camera app Instagram could be delayed, insiders have suggested, with the US government investigation into the deal potentially causing the social network to miss its Q2 2012 deadline. Although a Federal Trade Commission (FTC) probe into any deal of this size is standard, two people familiar with the investigation tell the Financial Times that the Instagram deal could be under the microscope for anything from six to twelve months.
Even at the shortest end of that timescale, that would put the deal finalizing in the middle of Q4 2012; if the investigation takes longer, it could be well into 2013 before the dust has settled. Facebook had previously said that it hoped to close the acquisition before the end of July 2012.
The reasons behind the prolonged investigation have not been explained, though the sources claim two of Facebook’s largest competitors – unnamed, through speculation has included Google of course – have been approached to give information. In the meantime, Facebook’s IPO roadshow continues, with justifying the $1bn spend on Instagram being one of founder and CEO Mark Zuckerberg’s key challenges when meeting with potential investors.
The insiders suggest that the deal is likely to go through, it may just take longer than Facebook was hoping for. Twitter is believed to have also approached Instagram in the months before the Facebook buy was agreed; it’s unclear if the short messaging service is one of the rivals the FTC will be questioning, though it seems likely.