In a jaw-dropping move, Facebook today bought the smartphone messaging app WhatsApp for a staggering $16 billion — $4 billion in cash, and $12 billion in Facebook stock. Facebook will also pony up an additional $3 billion in restricted stock for WhatsApp's founders and employees.

Facebook’s founder Mark Zuckerberg said, "WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable.”

As I wrote last month, Facebook’s core business — its social network — is floundering with teenagers, who are deserting it in droves even as it remains popular with older users. One option for Facebook to remain viable is to make reasonable acquisitions. This is what Facebook did with Instagram at what now looks like a bargain price of $1 billion. It is also what it attempted to do with Snapchat for $3 billion.

Here’s what Facebook is getting for its $16 billion. According to The Verge, WhatsApp has over 350 million monthly active users, who share 400 million photos and 10 billion messages a day. Late last year, WhatsApp overtook Facebook as the top mobile messaging smartphone application, with 44 percent of mobile users using WhatsApp more than once a week, compared to 35 percent using Facebook messenger. In the teenage demographic — arguably the key to social network's success — WhatsApp is leading the way.

Seeing as WhatsApp was founded only in 2009, these are all pretty impressive feats. Even more impressively, WhatsApp claims to already be a profitable business. WhatsApp is certainly a hot property — but nobody really knows whether it is an overnight phenomenon like MySpace or Farmville or a more durable property.

So has Mark Zuckerberg lost the plot? Is Facebook getting desperate? Is this a sign that the technology industry is in a totally insane bubble reminiscent of the 90s tech boom-and-bust?

We haven’t seen WhatsApp’s books, but for comparison Twitter is currently valued at $20.45 billion with an estimated 600 million users. So a $16 billion valuation for a company with 350 million users — and counting — does not seem totally insane, especially if that company is already very profitable (unlike Snapchat).

But I very strongly doubt that Facebook couldn’t have found better uses for its $4 billion in cash — developing new products and technologies, and putting seed money into other, smaller startups. Frankly, this seems like a desperate move. Facebook is a big beast, the biggest beast in the industry. It has time and money on its side, and throwing huge sums at acquiring the flavor of the month may look very, very dumb in hindsight.

In the industry Facebook is in, buying out the competition at a decent price may be a smart move. But Facebook can't spend $16 billion every time a competitor shows up. Next month, next year, and the year after there will come more startups. Does Facebook have billions of dollars to throw at every fledgling startup that gains a few hundred million users? That could get very expensive — especially when that money could instead be invested in researching and developing new technologies.