Twitter, Instagram Deal Almost Happened For $525 Million: NYT

Twitter Almost Beat Facebook To Instagram Purchase: Report
A picture taken on April 10, 2012 shows the smartphone photo sharing application Instagram on an Iphone next to the Facebook application, one day after Facebook announced a billion-dollar-deal to buy the startup behind Instagram. The free mini-program lets people give classic looks to square photos using 'filters' and then share them at Twitter, Facebook or other social networks. AFP PHOTO THOMAS COEX (Photo credit should read THOMAS COEX/AFP/GettyImages)
A picture taken on April 10, 2012 shows the smartphone photo sharing application Instagram on an Iphone next to the Facebook application, one day after Facebook announced a billion-dollar-deal to buy the startup behind Instagram. The free mini-program lets people give classic looks to square photos using 'filters' and then share them at Twitter, Facebook or other social networks. AFP PHOTO THOMAS COEX (Photo credit should read THOMAS COEX/AFP/GettyImages)

SAN FRANCISCO (Reuters) - Weeks before he accepted a $1 billion offer from Facebook Inc, Instagram CEO Kevin Systrom had verbally agreed to sell his photo-sharing company to Twitter Inc for $525 million in March - but then called off the deal, according to a New York Times report citing unnamed sources.

Facebook CEO Mark Zuckerberg ultimately acquired Instagram after pushing through a cash-and-stock deal just weeks before Facebook's May initial public offering. The transaction closed in September at a $715 million valuation, reflecting Facebook's stock drop since the offering.

During negotiations with Instagram, Twitter executives had handed Systrom a term sheet outlining the details of the proposed deal, the Times reported, but Systrom later told California state regulators under oath that his company had not received any "formal offers or term sheets" from potential buyers aside from Facebook.

Relations between Twitter, Instagram and Facebook have soured since Facebook successfully swooped for the photo service. Earlier this month Instagram shut off a functionality that allowed Twitter to display Instagram pictures, while Twitter introduced its own photo color-filters to compete with Instagram.

A spokeswoman for Facebook declined comment. Twitter could not be immediately reached for comment.

(Reporting By Gerry Shih; Editing by Marguerita Choy)

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