Facebook is on the verge of one of the biggest IPOs in recent history, yet it still had some time to work on a $1 billion acquisition.

The social network is buying Instagram, a photo-sharing software company, in a cash-and-stock deal that is its largest acquisition so far. And the move is a smart one.

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Instagram has been a phenomenon over the past couple of years. Users can't get enough of the digital filters it easily applies to photos taken with phones and other mobile devices.

What a story for Instagram, the free application that is just a couple of years old and already has 30 million users. Apple (AAPL) named Instagram its top application last year, saying it made it "near-impossible to take a bad shot."

Facebook will allow Instagram to run on its own, The Associated Press reports. And Facebook won't get in the way of competitors, such as Twitter, that want to display Instagram pictures.

"We need to be mindful about keeping and building on Instagram's strengths and features rather than just trying to integrate everything into Facebook," Facebook CEO Mark Zuckerberg wrote in a post announcing the deal. "That's why we're committed to building and growing Instagram independently."

Facebook has had its eye on mobile photo sharing for some time now. In its current setup, sharing phone photos on Facebook is too time-consuming and complicated. Instagram is about as easy as it gets. Rather than try to develop a competing service, Facebook thought it was easier to just snap up Instagram.

And as TechCrunch points out, with 27 million users on Apple's iOS platform alone, Instagram was becoming a social network of sorts already. Instagram didn't have much revenue to speak of, but it was on track to get 50 million users. "And with that kind of momentum, Facebook felt like it had to move -- fast," Josh Constine writes.

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