This is pretty amazing for Whatsapp. A missed opportunity for Google? (many of us have been saying they should have snapped up Whatsapp a lot sooner : cc: ) .
In a comment on Hacker News many are saying Facebook paid too much : Whatsapp has 400 Million Users so at $16 Billion - this works out to approx : $40 / User.
In a response to that comment I said:
"It is pretty amazing that this is precisely what Microsoft paid for Hotmail in 1998 : $400 million for 10 million users = $40 / User. 
The parallels are striking : Whatsapp is to messaging today what
Hotmail was to messaging in the late '90s."
Some more thoughts about why Facebook is buying Whatsapp
(also posted on Hacker News)
In my view, and based on my own experience, Whatsapp is being used as a light-weight social network built around messaging and optimized for mobile phones. In fact, I share a lot more stuff with friends and family on Whatsapp - including pictures/videos/messages - than I do on Facebook.
The more Whatsapp satisifies my sharing needs, the less I use Facebook. And that is a competitive threat to Facebook. Instagram was similar - a light-weight social network built around photo-sharing.
I think Zuckerberg is a deeply strategic thinker trying to avoid the pitfalls of the "Innovator's Dilemma". Both Instagram and Whatsapp are classic examples of what is described in Innovator's Dilemma - light-weight products that can slowly eat into the market share of the incumbent, and ultimately displace it.
Apparently Larry Page was not only willing to outbid FB but also assured that Whatsapp could stay independent.