This Week... Virgin plans first UK domestic operation, Visit Britain wants London 2012 to be the first social media games and Facebook buys Instagram

To help you catch up with all of last week’s top travel and technology news, we’ve picked out the most substantial stories in the news for your reading pleasure.

Travel News:

Virgin plans first UK domestic operation – Virgin Atlantic is planning to launch its first domestic flights if it wins 12 pairs of Heathrow slots to be relinquished by British Airways' parent IAG following its takeover of bmi.

The airline, which is calling on the European Commission to auction all 12 slots as one complete package, told the Daily Telegraph it would launch domestic flights next summer if it was successful in winning the slots.

Virgin currently holds just 3% of Heathrow's slots, while IAG will hold 51% after the bmi deal completed 20th April.

The auction process is expected to begin in several weeks and Aer Lingus is likely to be among those bidding against Virgin.

Visit Britain wants London 2012 to be the first social media games - Speaking at an Institute of Travel and Tourism dinner, Sandie Dawe, Visit Britain Chief Executive, admitted that this year could be “tricky” for UK tourism due to the event. But she said people who put off coming to the UK because of perceptions that London will be inundated with visitors will be encouraged to visit by those who do come sharing their experiences.

"My hope is that the Games will be a massive success in terms of spectator experience,” she told travel industry guests at the House of Commons event. “Most of the sport and all of the torch relay will be played out against the backdrop of historic sites, attractions, towns and villages. If people are having a good time, images of people having a good party will be shared around the world and London will be seen to be a fun place to visit. I hope that people will be Tweeting and Facebooking I'm having the time of my life, this is cool, let's come back next year."

Asked about reports of inflated hotel prices in the UK, issues like APD and VAT levels and perceptions of the chaos the games will cause in London, Dawe admitted there was a “propaganda war” going on to persuade people to come.

"The tourism industry has been aware of the issue right from the start that the year you host the Olympics your tourism is likely to go down,” she said. "In terms of what we are doing about it we have for the past few years been pumping out information to tour operators and the media about the facts - London is not closed. You are up against the perception in Olympics year that people will give it a miss and they will come next year. It's like a propaganda war. It's likely to be a tricky year. Theatres and attractions are quite worried and some have built in to their projections that they will be up to 40% down."

Dawe said high level discussions have been had with hoteliers, Visit Britain and the British Hospitality Association and they have been unable to persuade them to change their pricing.

Technology News

Facebook buys Instagram photo sharing network for $1bn - Facebook has announced it is to buy Instagram, the popular photo sharing smartphone app. Facebook is reportedly paying $1bn (£629m) in cash and stock for the takeover. Instagram was only launched in October 2010, initially just for the iPhone before being offered as an Android app last week. Facebook's Chief Executive, Mark Zuckerberg, has pledged to continue to develop Instagram as a separate brand, allowing it to post to rival networks. The app is free and allows users to apply 17 filters to the pictures they take, changing the colour balance to give the images a different feel before they are uploaded. It has proven hugely popular. The firm says that it has more than 30 million users uploading more than 5 million new pictures every day.

Paul Kedrosky, a Tech Investor and author of the Infectious Greed blog, told the BBC: "I understand Instagram has 13 employees - so at $77m a head that makes it the most expensive business deal in history that I can think of"

Mr Zuckerberg wrote on his Facebook page: "We think the fact that Instagram is connected to other services beyond Facebook is an important part of the experience. We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook." He added: "This is an important milestone for Facebook because it's the first time we've ever acquired a product and company with so many users. We don't plan on doing many more of these, if any at all."

Mr Kedrosky said the speed of the deal was unusual, “I'm told it also came together very quickly, like a lightning strike. After launching on Android last week and adding one million users a day, it became obvious that this wasn't just a photo sharing app - it was a competitive social network, and the concern may have been that there would be rival bids. That's the only reason to think Facebook would have done this in the quiet period ahead of its flotation."

Instagram's FAQ says it had previously raised $7.5m in funding from three venture capital firms and "a small group of angel investors".

The deal marks the second time in four months that Facebook has taken on staff from another social network. In December, it announced it was hiring the co founders of the location based check in service Gowalla. The network closed down shortly afterwards.

The moves come ahead of Facebook's planned flotation later this year. The firm reportedly plans to issue $5bn worth of stock on the New York-based Nasdaq exchange in May or June. The deal could value the firm as being worth as much as $100bn.

Microsoft to buy AOL patents for $1.1bn - AOL will retain a licence for the patents and return a 'significant portion' of the sale proceeds to shareholders. AOL is to sell more than 800 technology patents and related applications to Microsoft for about $1.1bn (£690m), in the latest land grab in an increasingly expensive battle for intellectual property.

AOL, facing pressure from unhappy shareholders, said it would return a "significant portion" of the sale proceeds to them. "The agreement with Microsoft represents the culmination of a robust auction process for our patent portfolio," said the Chief Executive, Tim Armstrong.

Patents are becoming increasingly hot properties as companies battle over the technology underpinning smartphones, social networks and tablet computers.

Google has struck the biggest deal so far, announcing plans last year to buy Motorola Mobility for $12.5bn, largely for its portfolio of mobile patents.

Samsung and Apple are engaged in court battles around the world over who owns which patents relating to Apple's iPhone 4S, iPad and Samsung's Galaxy Nexus.

AOL owns patents relating to instant messaging, online chat and email, online media, search and browsers.

"Many of these patents relate to fundamental online communication technologies, stemming from AOL's early dominance in the instant messaging and email markets," the patent analyst Envision IP wrote in a blogpost.

AOL has not said exactly what the patents cover. Under the terms of the transaction it will retain a licence for them.

The deal may come as a useful reprieve for Armstrong, who is facing pressure from the activist investor Starboard Value. Starboard is mounting a proxy campaign to win seats on AOL's board, and has been critical of Armstrong's decision to focus the firm on online media such as the Huffington Post, which it acquired last year for $315m.

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