Facebook closes its purchase of Instagram

Facebook has closed its purchase of Instagram, the wildly popular photo-sharing app that it agreed to buy before its initial public offering in May.

The deal was valued at $1 billion when the companies agreed to it in April. But Facebook's stock price has lost half of its value since its IPO. With Facebook trading around $19 a share at midday Thursday, the deal is worth about $737 million, $300 million of it in cash and the rest in stock.

Even at the lower price, Instagram is by far Facebook's largest acquisition and the only one that Facebook has promised to keep going, rather than shutting it down.

"Instagram will continue to serve its community, and we will help Instagram continue to grow by using Facebook's strong engineering team and infrastructure," said Mike Schroepfer, vice president of engineering at Facebook Inc., in a blog post. Facebook is also hiring Instagram's dozen or so employees and said it will work with them to help improve its own mobile applications.

Instagram has a fast-growing and loyal user base of iPhone and Android users who take photos and apply various filters to them to share. Unlike Facebook, which was created with computers in mind, Instagram exists only as a mobile application.