Money Matters - Simplified

Facebook acquires facial recognition startup for $ 100 million

Finally all speculations have been put to rest. Facebook has announced its acquisition of Israeli facial recognition technology The acquisition price was around $100m, with different reports claiming the price to be between $80m-$100m.

The deal boost one of Facebook's most popular features; the sharing and handling of photos but the use of the start-up's technology has spurred concerns about user privacy. Neither Facebook nor disclosed terms of the deal, which is expected to close in coming weeks.

Facebook, which will acquire the technology and the employees of the 11-person Israeli company, said in a statement that the deal allows the company to bring a "long-time technology vendor in-house"., which has raised nearly US$5 million from investors including Russian Web search site Yandex, launched its first product in 2009. The company makes standalone applications that consumers can use to help them identify photos of themselves and of their friends on Facebook, as well as providing the technology that Facebook has integrated into its service.

Facebook uses the technology in the Photo Finder app to scan a user's uploaded photos, compares faces in the snapshots with previous pictures, then tries to match faces and suggest name tags. When a match is found, Facebook alerts the person uploading the photos and invites them to "tag", or identify, the person in the photo.

This deal is of prime importance to Facebook as well, because right now there’s probably a ton of untagged mobile photos getting posted. Those are lost opportunities for engagement because when you get notified that you’ve been tagged in a photo, you probably visit Facebook immediately to check it.

"Today, facial recognition for Facebook is about photographs. But future uses of this technology could absolutely extend to recognizing people in the real world," said Forrester analyst Sarah Rotman Epps. "Facebook is becoming a search engine for people. It's building a catalog of humans, and today that’s a two dimensional experience. Tomorrow it will take place in the physical world."

The $1 billion Instagram purchase made it obvious that Facebook sees mobile photos and the communities that share them as critical to its future. Once that acquisition closes, Facebook could even port’s facial recognition to Instagram.

With Instagram and Facebook Camera and the recently acquired, Mark Zuckerberg has the required ammunition he needs to win the war for mobile photos.