Backstory on Instagram and why Facebook bought it for $1 billion

Actually, Instagram hasn't been around long enough (2010) for there to be much of a backstory. Its free app allows users to share photos on social networking platforms - and it's very popular, with more than 5 million images uploaded each day. Facebook has been slow to innovate in this area, which explains the interest (and crazy high price). From the NYT:

Last week, Instagram closed a $50 million financing round with several prominent investors, including Sequoia Capital, an early backer of Google; Thrive Capital, the firm run by Joshua Kushner; and Greylock Capital, an early investor of LinkedIn. The round valued the photo service at about $500 million, according to one person with knowledge of the matter, who requested anonymity because the discussions were private. With Facebook's purchase, one week later, that investment has now doubled in value.

From the WSJ:

Users also can comment on photos and "like" them. Some people describe the app as a visual version of Twitter, where it is heavily used to share photos. The deal presents a quick bonanza for the startup, which was founded in the fall of 2010 by two Stanford University graduates and has just over a dozen employees. The company's software, which is free and until recently only available on the iPhone, allows users to touch up and share photos with followers on Instagram or other social networks, such as Facebook.