You can't say yet whether it was a poor choice. Instagram was a very credible threat to Facebook. Its growth curve and primary use bear a strong resemblance to Facebook's.
People laughed at Google for buying YouTube for $1.65 billion. Now every single big company wishes they had done it instead.
You're missing my point; I'm not questioning the decision but the process, the governance. The board is there to represent shareholder interests, if they get bypassed like this on a decision this big, then what is the point of them being there?
I think it was Sergey Brin who recently said something about an investment in Google being a long-term bet on his/Page's decision making. It's like the world has suddenly forgotten why businesses are structured the way they are.
To make an unrelated, more controversial, point: if a CEO can take arbitrary, unilateral decisions, it's difficult to see why they should benefit from the protection of corporate liability.
They weren't bypassed. The deal was brought to them by the CEO for ratification. It will be subject to extensive due diligence, like any deal such as this is. That's exactly how it's supposed to work.
There's nothing "arbitrary" about his decision to buy Instagram. And the fact that he makes decisions like this shouldn't be any more cause for concern then the fact that he makes decisions about whether to buy hundreds of millions of dollars worth of servers, hire 5000 more employees, or whatever.
The board is there to advise and prevent malfeasance -- not to run the company.
Complaining about how some of the most successful companies in history are run (Google/Facbook/Apple/Microsoft) is rather odd. Do you really think their shareholders would be better served with boards like HP's?
The board is there to advise & CEO and provide support, and step in if things go wrong.
In this case it's worth noting that the CEO is also the largest shareholder, so it is difficult to argue they weren't representing shareholder interest.
Zuckerberg obviously doesn't give a shit what public investors think, and rightly so. You can't lead a world-changing company in growth stage by kowtowing to what "the market" thinks. Instead he will do what he thinks is best for Facebook, and if it works, the stock price will go up, if it doesn't, it will go down.
The IPO structures the company so Zuckerberg has ultimate control anyways. He has 28% of the class B shares (which are 10x the votes of the class A shares being sold in the IPO).
People laughed at Google for buying YouTube for $1.65 billion. Now every single big company wishes they had done it instead.