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Instagram Was A Bargain Content Buy for Facebook
One way to view Instagram acquisition is to view it as content acquisition.
If you consider Facebook as a social content distribution network. Then what facebook needs is content.
We all know web is a visual medium, and photos and picture are a great content for this medium. Photos enables us to grasp so much in one snap. Even better than video can ever be.
Buying Instagram gave facebook a large network of high quality content producers. Most Instagram photos I've seen have a higher quality and broader general visual appeal than average friends and family facebook photos.
In the same time you need to look at how Google+ is becoming the photographers choice to promote their photos. Most photographers I know have at least 10X the amount of G+ followers than they have on Facebook.
One of the reason is that G+ does a much better job at preserving the quality of uploaded images. Facebook manages an enormous amount of photos and they have been forced to compress these images to manage storage and bandwidth.
The second reason is that google beat facebook to the punch by being first in having unlimited followers. As a result most photographers (including myself) have a larger G+ followers than on facebook and prefer to upload images to G+.
Instagram acquisition suddenly gave facebook access to a select group of photographers-an unlimited amount of above average photos. Granted there is going to be a huge overlap with existing facebook users. But Facebook could have never afforded to lose these high-valued group of content producers to Google and potentially risk loosing all that content.
It was a great move by Facebook and in a few years everyone would agree it was a bargain.