Facebook Inc. said it is acquiring the popular photo-sharing app maker Instagram for $1 billion in cash and stock in what is the social network's biggest acquisition to date.

Facebook, which is in the process of going public in an offering that will raise as much as $10 billion, has stayed away from big acquisitions. The Menlo Park, Calif., company has traditionally purchased small start-ups for tens of millions of dollars, often discarding the technology and focusing on the human talent that comes with the deal.

Instagram bills itself as a fun and quirky way to share photos with friends. A user can snap a photo with an iPhone, then choose a filter to transform the look of the shot, with the app originally known for a look akin to old photographs.