Snapped up for $1bn: Facebook buys photo-sharing rival Instagram in record deal

Founders make a fortune in a flash – 551 days after setting out to build their app

What do you get if you keep Mark Zuckerberg awake at night? One billion dollars, that's what.

In what must be the fastest fortune ever made in smartphone apps, an industry known for light-speed success, the entrepreneurs behind Instagram took just 551 days to build and sell their photo-sharing software business for a 10-figure fortune. Last night, they were toasting selling Instagram to Mr Zuckerberg's Facebook and promising that Instagram's 30 million users would barely notice the difference.

As for Mr Zuckerberg, he was celebrating nipping in the bud a potential rival, whose spectacular growth raised comparisons with Facebook's own explosive growth, and which had been causing palpitations inside the giant social network.

Instagram was launch in October 2010 and millions of iPhone users were quickly drawn to its quirky mix of features, which included being able to put sepia tints or hip artistic flourishes to photos on your camera phone, giving them the retro feel of a Polaroid and making it easy to share them with friends. In the process, Instagram was building a social network whose users were connecting on smartphones in much the same way that people use Facebook.

While Mr Zuckerberg remains the undisputed king of social networking, commanding more than 800 million Facebook users around the globe, with mobile devices threatening to overtake the personal computer as the most popular way to access the internet, there is no guarantee a new mobile-focused network could not emerge and overthrow Facebook.

"This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users," Mr Zuckerberg said in a blog post yesterday. "We don't plan on doing many more of these, if any at all. But providing the best photo-sharing experience is one reason why so many people love Facebook, and we knew it would be worth bringing these two companies together."

Kevin Systrom and Mike Krieger, two Stanford University graduates who built Instagram, will continue to run the business from within Facebook. They said they "couldn't be happier" with the deal.