Social networking company Facebook has written a $60 million cheque to buy Face.com.
According to Reuters, Face.com provides the facial-recognition technology used by Facebook to help users identify and tag photos.
The deal locks in the 11-person Israeli company to Facebook. Its software is one of the site's most popular features, even if it does spur concerns about user privacy.
There had been rumours of a buy out but they were wildly out of step with what Facebook was prepared to pay for Face.com. Rumours were that Mark Zuckerburg was prepared to spend between $80 million to $100 million to get the company.
Facebook will acquire the technology and the employees of the company.
Face.com raised nearly $5 million from investors including Russian web search site Yandex and launched its first product in 2009. When it is not under the bonnet of Facebook, 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.
The software sparked an inquiry from US and European privacy advocates, and Facebook last year made it easier for users to opt out of the technology.
Facebook has been spending big recently. There was the $1 billion acquisition of mobile photo-sharing service Instagram, which is being looked at by US antitrust regulators.