I have a slightly different and gut-feel driven take on this. Much of Facebook's valuation is dependent on the potential of the company to monetize its user base at a much greater level in the future. This is commonly referred to the 'narrative' that investors and markets like.
Of late, that narrative has been wearing a bit thin. They're adding users at a crazy pace, but monetization has not kept pace and by the time the IPO comes out, by virtue of more actual information being public, the buzz around the company will take even more of a hit.
Instagram is only step towards shoring up that narrative and once they go public, I'll expect more such deals to come through. They did not acquire the company because they were scared of it.
With that, I'll end my amateur attempt at mind reading :)
Of late, that narrative has been wearing a bit thin. They're adding users at a crazy pace, but monetization has not kept pace and by the time the IPO comes out, by virtue of more actual information being public, the buzz around the company will take even more of a hit.
Instagram is only step towards shoring up that narrative and once they go public, I'll expect more such deals to come through. They did not acquire the company because they were scared of it.
With that, I'll end my amateur attempt at mind reading :)