Paddy Power, Europe's largest betting company, has gone so far as to lay odds. It has check-in service Foursquare at 4-to-1, followed by note-taking app Evernote (9-to-2) and consumer cloud-computing service Dropbox (5-to-1).
Social-sharing site Pinterest, a digital pin-up board, is down the list because, as analyst Jonathan Yarmis points out, it doesn't have nearly the loyal customer base as Instagram and could face issues over intellectual property.
Facebook, which is expected to start trading on Nasdaq in May, had no comment.
Facebook's buying spree — it has scooped up a handful of small start-ups in the past year — underscores the competitive pressure it's under as it nears what is expected to be the biggest Internet IPO and its rivalry with Google intensifies.
"Facebook is taking two simultaneous paths," says Brandon Lee, co-founder and CEO of Social Stage, a Facebook app for small and midsize businesses. "Keep customers coming back, and fill in gaps in its product portfolio."
For that reason, Facebook may eye video-sharing service Vimeo, just as Google bought YouTube for $1.65 billion in 2006, Lee says.
Instagram signifies a change in direction from Facebook's previous strategy of buying, at bargain-basement prices, small-staffed companies that are on the "downslide" with smart founders, says Teresa Caro, vice president of social marketing at Engauge, a digital-marketing agency.
After getting location-based service Gowalla and acquiring social-networking patents from Friendster, "Facebook decided to spend a lot more for a stronger mobile presence — and Instagram helps," Caro says.
Facebook's Instagram buy could portend a few more deals, such as Google's pursuit of Pinterest, to acquire eyeballs and data, and Facebook's possible interest in Path, a popular social network for smartphone users, she says.
But the staggering price paid for 11-person start-up Instagram has some murmuring about another Internet bubble. Version 2.0, anyone?
"Unreasonable salaries. Unreasonable amounts paid for companies. Lack of resources," Caro says. "It's all so unrealistic, and it feels like a do-over for me."
Google would be well served to sidestep the merger game and let Facebook gobble up more start-ups, says longtime tech analyst Lou Mazzucchelli.