Rumours are that Twitter was very interested in purchasing Instagram for itself, but lost out to Facebook, despite Jack Dorsey, the creator of Twitter, investing in Instagram in 2011.
So why was Instagram sold to Facebook rather than Twitter? Well we're unlikely to find out why, but it might have been due to the large cash reserves that Facebook currently has, but rumours are that the sale of Instagram was based on Facebook Shares and not cash, which will be due to Facebook's IPO which is expected to happen soon.
To the relief of its fans, it's believed that Facebook will keep Instagram as a separate company and not rebrand it, but it's likely that Facebook will implement some of the Instagram's photo editing features into their own application, Facebook founder Mark Zuckerberg said he wants to build upon Instagram's strengths and not just plug it into the Facebook platform.
Instagram's co-founder and CEO Kevin Systrom said that Instagram "is not going away" and that working with Facebook will allow them to develop it further and increase membership numbers, which has certainly come true with the recent release of the Instagram Android application which saw Instagram's membership numbers hit the 40 million users mark, an unbelievable 5 million downloads in just 6 days, something the iOS application took 6 months to achieve.
It's rumoured that Twitter will now develop its own Instagram style photo editing suite.