Let the Instagram conspiracy theories begin!

A billion dollars is a lot. To put Facebook’s Instagram acquisition in context, it’s the number Justin Timberlake helped screen-rendered Facebook founders dream their company might be worth someday, and it became the most famous line in the movie. A few short years later, that’s the number Facebook is shelling out to acquire Instagram. It’s a hefty purchase.

What’s weird about it is that, with the exception of the cool retro filter that made the app famous, Instagram doesn’t really do anything that Facebook doesn’t do already. And for sure, the filter is cool—it allowed people to make their pics look like old Polaroids at the exact moment Polaroid was going extinct, and they capitalized beautifully on the nostalgia factor.

But a billion dollars? Other than the filter, the app allows you to take pictures and share them either through Instagram, where a few people will see them, or through Facebook, where more people will see them. It also allows you to add a location to your photos so people know where you are. Facebook does all of that.

But as AllThingsD points out today, most people don’t add a location to their Facebook photos.

Facebook is by far the number-one photo sharing service in the world, with about 250 million photos uploaded every day. But one area they haven’t been very successful in is getting users to adopt its locations services. After acquiring Hot Potato they rolled out Facebook Places, which allowed you to check in to locations and get deals—it got such a tepid response they shut it down last August. In its place they allowed users to geotag their photos, but it’s not clear many users have started doing it.

Noting that at least anecdotally Instagram users seem to geotag their photos, AllThingsD writes, “When a location isn’t specified, Instagram loses some of its original appeal: That of the modern postcard, easily shared through a simple mobile app.”

As Facebook gets ready roll out its IPO in May, it’s probably looking down the road for ways to expand its future revenue streams—publicly traded companies need constant growth. If the company can keep Instagram growing and keep users geotagging their locations, it may open up new worlds of geo-targeted ads and deals opportunities Facebook never saw come to fruition with Facebook Places.

Of course, this will all raise red flags with privacy hawks, who accuse Facebook of overreaching data mining in the pursuit of ad dollars. Will they be right? Who knows—Facebook has made some sketchy moves on privacy in the past. But at least for now you always have the option to turn off the location-share button on Instagram.