Reimplementing it would take time, and as with any large software project, there's no guarantee of success. How much do you think Google spent on G+, between wages, acquihires, and the like? Would it not have made more sense had they just bought facebook? G+ is still a nascent, fragile, pseudo-success. Facebook was proven and growing when Google made their offer.

Facebook could have remade Instagram, but there's no guarantee users would like it. Instead, now they have Instagram, its users, its growth, and its cachet; they've solved the photosharing hole in their app in one fell swoop.

Sometimes it's better to pay more for a sure thing. Plus, they got 12 new employees, so it's really only about $83MM each...

Agreed; FB could try to re-implement, but there is no guarantee they'd come even close to what Instagram had accomplished.

In cases like this, it makes more sense to purchase someone with momentum rather than try and build it yourself.

I'm pretty sure Google would have bought Facebook if they could have. Facebook was not for sale.

Re-implementation means that they would be second or third to market. You have to be first in a new category, and Instagram defined the mobile/social sharing space.

You only have to be first to get the network, and they already have the network.

Ebay tried building a Paypal killer and was not successful even though they owned the network. They ended up buying Paypal and killing their own offering because no one was using it. It has been said many times now that buying Paypal was one of the best decision by Ebay management.