Facebook Graveyard: Was Instagram Acquired to Shut It Down? (Photos)

Instagram fans fear Facebook bought the firm just to shut it down. See other companies Facebook axed.

When Mark Zuckerberg’s social network acquired the photo app Instagram this week, there was instant speculation about whether the popular photo-sharing service, for which Facebook laid out a cool $1 billion, will survive. Those fears aren’t unfounded: in 2010, Zuckerberg told a crowd of aspiring startup owners, “We have not once bought a company for the company. We buy companies to get excellent people.” The acquisitions Facebook made in the past, however, were usually very small companies, none of which compared in popularity with Instagram, a distinction Zuckerberg has emphasized when talking about the purchase. “This is an important milestone for Facebook because it’s the first time we’ve acquired a product and company with so many users,” Zuckerberg wrote in a post announcing the buy.

The Daily Beast collects 11 companies Facebook picked up only to shut them down.


Facebook made its first acquisition in July 2007, when it bought Parakey, a startup headed by Mozilla Firefox cofounders Blake Ross and Joe Hewitt. “The work they’ve done with Firefox and Parakey and their approach to building products fit right in at Facebook,” Zuckerberg said in a press release at the time. Parakey’s website went black after Ross and Hewitt joined Facebook’s team.


The fledgling photo-sharing startup was snatched up for its engineers, who joined the photo squad over at Facebook. This was the social network’s third acquisition in 2010, and while the financial details weren’t released, the company called the deal an offer it couldn’t refuse. While the boys and girls of Divvyshot headed off to new projects, the site was promptly shuttered. Founder Sam Odio went on to serve briefly as product manager for Facebook photos before leaving to pursue another passion project.


Facebook acquired this small group-chatting startup in May 2010, and the company promptly shut down its operations the next month. ShareGrove allowed users to send messages, photos, videos, and links to a group of fellow chatters. ShareGrove as such was no more, but not dead completely. About a year later, Facebook rolled out Group Chat, expanding on what until then had been its somewhat limited chat capabilities.


Facebook was the last stop for NextStop. The travel-recommendation site got picked up in July 2010 and was swiftly given the coup de grace, closing up shop a few months after the acquisition. True to Zuckerberg’s acquisition credo, this buy was about talent, not product. “Members of the nextstop team are joining Facebook and we hope that some of the central ideas behind nextstop will live on,” the company wrote on its website at the time. “We’re shutting down the current version of nextstop so we can focus all of our attention on what comes next.”

Hot Potato

A check-in service similar to Foursquare, Hot Potato was sold to Facebook for about $10 million in August 2010. The social network had recently announced its entry into the popular location-services market with the introduction of Facebook Places, and again, this buy was about talent. The allure of working at the most notable of all Internet success stories was simply too strong for the Hot Potato founders to resist. “If Hot Potato was going to sell to anyone,” the company wrote in a blog post, “Facebook was the natural choice.”


Facebook acquired the site for storing and downloading files in October 2010, then pulled the cord. Users could cache video, audio, and other file types on the site, and it grew a respectable userbase, which included customers who paid for the service, before being scooped up by Facebook. The company’s services were shut down gradually over two months after the deal was announced.


Mobile-messaging application Beluga was also given the Facebook chop after it was bought. The decision to shut the product down was made after the launch of Facebook Messenger, which was similar in design and concept to Beluga’s product. In a move slightly different from some other acquisitions, Facebook struck its deal with Beluga in March and integrated the company’s staff and technology, but refrained from shutting down the service until a few months after Messenger’s August launch.

Digital Staircase

The photo- and video-application developer joined the Facebook family in November 2011 and wrapped up independent operations the next month, pulling its product from the Apple App Store. The startup developed mobile applications like MovieCam and SmartSplice, and the Facebook acquisition would help the founders “bring these kind of mobile innovations to a broader audience,” they wrote in a blog post.


The founders of this email-prioritization service shut down their company after Facebook staged another talent raid in November 2011. Zuckerberg, who back in 2010 declared email “dead,” may have wanted to bring MailRank’s staff on to help him perform a postmortem.


In January 2011, Snaptu created a Facebook app for people without smartphones. Zuckerberg must have liked what he saw, because only two months later he bought the company, and whispers at the time were that it would be killed almost immediately. The service hung around until the following December, however, shutting down as its staff focused on building Facebook’s mobile presence.


One of Facebook’s largest acquisitions to date, the location-sharing service had an estimated 1 million users when Facebook bought it in December 2011, bringing on its employees to work on Facebook’s Timeline feature. Gowalla, which vied with Foursquare for control of the check-in market, shut down for good in March.