That’s right, Facebook acquires Instagram for $1 Billion in cash and stock.
Here are some points regarding this acquisition (from what Mark Zuckerberg) wrote:

• “We plan on keeping features like the ability to post to other social networks, the ability to not share your Instagrams on Facebook if you want, and the ability to have followers and follow people separately from your friends on Facebook.”
• “At the same time, we will try to help Instagram continue to grow by using Facebook’s strong engineering team and infrastructure.”
• “This is an important milestone for Facebook because it’s the first time we’ve ever acquired a product and company with so many users. We don’t plan on doing many more of these, if any at all.”

Just for another reading: Google acquired YouTube for $1.65 billion in November 2006. And, here are some numbers about Instagram (Source: AllThingsD):

• 430K+ on its Android waiting list
• 30 million+ registered users
• 1 billion+ photos uploaded
• 5 million+ photos per day
• 575 likes per second
• 81 comments per second