Media reports in past weeks have pegged the size of the transaction at between US$80 million to US$100 million (PKR 7.52 billion - PKR 9.40 billion), but two people familiar with the terms of the deal said the actual price was below the low-end of that range.
Neither Facebook nor Face.com disclosed terms of the deal, which is expected to close in coming weeks.
Face.com specializes in facial recognition — its technology is used by 45,000 developers. And the company has a special expertise in mobile facial recognition: its Klik app tags people within photos before they’re even taken, while you’re holding your phone up. Google and Apple also offer facial recognition technology to tag people in photos, but Face.com is distinguished by its mobile focus, which could give Facebook users the advantage of quickly tagging friends while uploading on the go.
Facebook has been on an acquisition spree, perhaps because it doesn’t have mobile built into its DNA. Two companies that are innately mobile—Instagram and Twitter—were starting to threaten Facebook’s core business, says BTIG analyst Richard Greenfield. He points out that while Facebook Camera premiered as the No. 1 free app in the iPhone app store, its position has plummeted to number 251, while Instagram has stayed in the top 10. This explains why Facebook is willing to spend $1 billion for Instagram, and speaks to the importance of acquisitions in mastering the mobile space.
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