The U.S. Federal Trade Commission has approved the acquisition of private Instagram of San Francisco by Facebook (Nasdaq: FB), the No. 1 social networking site, the companies said. Originally priced at $1 billion, the value of the deal has shrunk to only about $750 million because of the slide in Facebook shares.

The FTC approved the deal unanimously Wednesday. "We are pleased," Facebook, of Menlo Park, Calif., said in a statement.

In the deal arranged before Facebook's May 17 initial public offering, CEO Mark Zuckerberg offered $300 million in cash plus 23 million shares for Instagram, the year-old photo-sharing website for mobile platforms that Facebook wants to expand its reach beyond the desktop.

California's Department of Corporations is scheduled to conduct a fairness hearing on the acquisition next week. Facebook shares rose 4 cents to $19.48 in early Thursday trading.