Facebook already made a 100-fold return on Instagram based on the social media platform’s value, Bloomberg Intelligence reports, citing its own market data and a subsequent analysis of the thereof. The Menlo Park, California-based firm acquired Instagram in April of 2012 for approximately $1 billion in cash and stock, with the newly collected information suggesting the digital platform is now worth over $100 billion. While Facebook still hasn’t actually generated that figure with Instagram in terms of revenue, let alone profits, it likely wouldn’t have too many issues with divesting the firm for that sum if it wanted to do so for any reason, as per the same report.
Instagram surpassed a billion monthly active users earlier this month and is expected to hit $10 billion in annual turnover by this point next year, the report states. The social media service is on course to double its user base over the next half a decade, according to analyst Jitendra Waral. Instagram held the title of Facebook’s most valuable acquisition for nearly two years until the internet giant announced its takeovers of Oculus and WhatsApp in the spring of 2014, valued at $2 billion and $19 billion, respectively. While the move was originally seen as a somewhat risky bet, the firm managed to evolve Instagram into a versatile platform that’s simultaneously competing with Snapchat and numerous other social media offerings. Its diversification efforts are now continuing with Instagram TV, a solution that appears to be set on directly taking on Google’s YouTube.
Instagram’s user base is still less than half the size of Facebook but continues to grow in the United States, the most lucrative digital advertising market on the planet where its parent has been stagnating in recent times. Its users are also much younger on average, thus being even more attractive to advertisers. Instagram accounted for over ten-percent of Facebook’s annual revenue in 2017 but may increase its contributions by six percentage points this year, eMarketer estimates. Instagram TV still doesn’t have a concrete monetization plan, with Facebook’s subsidiary signaling it will initially be focusing on growing the concept of hour-long videos before thinking about making money on them. The service is still exploring monetization opportunities on other fronts, having recently experimented with the idea of implementing e-commerce features into its ephemeral Stories format.