Facebook is due to float on 17 May Reuters

Facebook (Nasdaq: FB), the No. 1 social network, is facing a probe into its acquisition of Instagram that could delay its $100 billion initial public offering.

The U.S. Federal Trade Commission is conducting a routine investigation into the $1 billion purchase of Instagram that could last six months to a year, the Financial Times reported.

Facebook, of Menlo Park, Calif., said it would acquire Instagram, of San Francisco, for a mix of cash and stock in a deal personally hammered out by Facebook boss Mark Zuckerberg and Instagram CEO Kevin Systrom.

Zuckerberg, 28, and other executives this week began their investor roadshow to plug the IPO, co-managed by Morgan Stanley (NYSE: MS), Goldman Sachs (NYSE: GS) and JPMorgan Chase (NYSE: JPM) and six other co-managers.

The FTC routinely examines acquisitions above $66 million to see if they remove competition. Until it approves the deal, Facebook can't integrate any Instagram applications. Zuckerberg said he wanted the company to bolster Facebook in the mobile platform space.

An insurance policy was negotiated: Instagram got Facebook to agree to pay a $200 million breakup fee if the deal failed.

Last year, AT&T Inc. (NYSE: T), the No. 1 telecommunications carrier, had to pay Germany's Deutsche Telekom (Pink: DTEGY) $3 billion in cash and provide another $1 billion in services when its $39 billion bid for T-Mobile USA was challenged by the FTC and the U.S. Department of Justice and called off.