Facebook buys Instagram ...but for what?

I am not real sure what this really means. But I think this is a good for Facebook as they get ready to release their IPO.

There's a lot of speculation today about why Facebook would spend $1 billion to acquire the uber-hip photo-sharing app Instagram.

To some, it seems obvious; to others, it's the biggest sign yet of a growing Web bubble. To me, it just raises question after question, and the biggest one is "why." What does Facebook gain from buying Instagram?

Users: Instagram has 30 million users and a potentially huge influx of more, thanks to its recent expansion onto the Android platform. Instagram CEO Kevin Systrom says he thinks Instagram should easily reach 100 million user - that's significant engagement, for sure.

But Facebook doesn't need users. Facebook has users - some 850 million of them. And while I've argued that Facebook's growth potential is slowing, the social network could scoop up another 100 million global users with its eyes closed over the next year, especially as its global expansion increases. And I'm not sure Facebook is in the market for more users so much as it's in the business of figuring out how to make money off those users. So far, Instagram represents more users, but not any more revenue: more mouths to feed, if you will. Facebook shouldn't be after more un-monetized users, at this point.

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