The simple and straight forward answer; Instagram was the biggest threat to Facebook's mobile photo sharing feature.
What makes Instagram so cool and popular is the ability to customize the photos by applying filters, making the photos appear very professional and instantly sharing on social networks including Instagram's own.
The growth of Instagram has been phenomenal. Just two years after its launch, Instagram hit 30 million accounts this month with users uploading over 150 million photos.
Instagram's free iPhone app became the number one app in the App store with over 15 million downloads, immediately Facebook acquired it.
When Instagram launched the Android app, over 1 million downloads happened within the first 24 hours.
The success has come with just a staff of 13 people led by the co-founders, Kevin Systrom and Mike Krieger. Facebook's $1 billion acquisition (in cash and stock) of Instragram has raised eyebrows especially seeing the photo sharing startup was valued at $100 million a year ago, and with no concrete business model.
Unlike other companies that have been bought (and killed) by Facebook, Instagram will be allowed to continue on its success path, as Mark Zuckerberg said as he announced the acquisition;
"We believe these (facebook and Instagram photo sharing) different experiences that complement each other. But in order to do this well, we need to be mindful about keeping and building on Instagram's strengths and features rather than just integrate everything into Facebook."
It seems part of the deal was for Instagram to operate independently of Facebook, but leverage on each other's strength.
"It's important to be clear that Instagram is not going away. We'll be working with Facebook to evolve Instagram and build the network...the Instagram app will be same you know and love.
You'll have the all the same people you follow and that follow you. You'll still be able to share other social networks," said Kevin Systrom, CEO Instagram.