Facebook to acquire Instagram in $1bn deal

Facebook is to acquire smartphone photo sharing network Instagram in a $1bn stock and cash deal.

The deal is the biggest for a profitless start-up since Google bought YouTube for $1.65bn in 2006.

The announcement comes just days after the popular photo app, initially available for iPhone only, launched an Android version.

Facebook chief executive Mark Zuckerberg has pledged to continue to develop Instagram as a separate brand, allowing it to post to rival social networks.

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"This is an important milestone for Facebook because it is the first time we have ever acquired a product and company with so many users," he wrote on his Facebook page.

Instagram claims to have more than 30 million users uploading more than five million images every day, according to the BBC.

The app, which was downloaded by one million Android users on the first day, allows users to share photos taken with their mobiles through its own site, Facebook, Twitter or text messages.

Facebook plans to list on the New York-based Nasdaq exchange in May or June by issuing $5bn worth of stock, but pundits say the Instagram deal could boost Facebook's value to $100bn.