04/23/2012 04:54 pm ET

Facebook: Why We Bought Instagram

With the release of an updated Form S-1 on April 23, Facebook has finally revealed to the world why it dropped $1 billion on Instagram.

According to the form, Facebook acquired the popular photo-sharing service for about 23 million shares and $300 million in cash. After the acquisition is complete, the social network said it plans "to maintain Instagram’s products as independent mobile applications to enhance our photos product offerings and to enable users to increase their levels of mobile engagement and photo sharing," according to the new filing.

The form continues thus:

We believe that mobile usage of Facebook is critical to maintaining user growth and engagement over the long term, and we are actively seeking to grow mobile usage, although such usage does not currently directly generate any meaningful revenue.

As VentureBeat points out, the S-1 shows the deal is expected to close within the second quarter of this year; however, if it falls through due to government intervention or a drop-out by either party before December 10 of this year, Facebook will have to pay Instagram a hefty fee of $200 million.

Facebook's initial public offering is rumored to be set for May 17.

What do you think about Facebook's acquisition of Instagram? Do you think the social network made the right move? Share your thoughts with us below!

[Hat Tip: Mashable]

Check out the slideshow (below) to see how tweeters reacted to Facebook's new stats.