Obviously, this is not the value of the income stream. Facebook's own valuation is not the value of its current income stream either. These valuations are bout potential and about competition. Potential to have a huge business created around them and fear of the competition buying the target.
IMO, Facebook has two big important things it needs to do: (a) Maintain its position the the social network where everyone has an updated profile & (b) figure out their ad business. Anything with real potential to impact those two is a potentially important buy. Instagram was/is a way to do the first by keeping people's photos on "facebook". Waze is a little less clear, but it has potential to meaningfully impact both. I can think of several paths that the buy could impact either A or B in a way that increases the total value of Facebook by more than $1b^.
I agree that valuations seem arbitrary when it's users, data & synergies instead of NPV (or book value). But that just means it's hard to put a number on it. It's just as hard to say that it's too high as it is to say it is too low.
^BTW, Facebook's market cap is currently $64b. Assuming they belive in that valuation, an acquisition that raises facebook's value by 2% is a good idea.
