All the social media “experts” are gloating that Instagram got $1B in FB stock. But if you think about it for a moment, you’ll realize it’s not true. Those so-called “experts” have no idea what they’re talking about.

FB offered cash and stock with a total value of $1 billion. The stock is most likely on a three year vesting schedule. That means three years X 12 months per year equals 36 months. Every month, they get 1/36th of the stock.

And I suspect they’re also in a six-month block: they can’t sell any stock for the first six months after the IPO (otherwise, they would sell at the IPO, thus crashing the stock.)

There are also targets and milestones: If Instagram reaches 50m users, they get a block of stock. If they reach 75m, another block. This also means if growth stops, they get no more stock.

And the team is probably also tied to FB: they have to stay at FB for three or four years. If they leave sooner, they lose their stock.

What will be the value of FB stock three years from now? It could be the current (wildly speculative) $100B. It could be higher. Or (very likely) FB stock will have the same value as MySpace, Geocities, or Tripod, or the other 250 social media clones of FB, which are all worthless.

So what did Instagram really get? Perhaps $20m in cash and a whole lot of promises of unknown value.