Citigroup: Instagram is worth $35 billion

Citigroup: Instagram is worth $35 billion
Back in 2012, Facebook announced that it was buying Instagram for $1 billion. Because Facebook's shares had declined by the time the deal closed, the actual value of the purchase was less than $1 billion. Once the acquisition had been finalized, everyone figured that Mark Zuckerberg had overpaid for the picture and video sharing site. After all, Instagram wasn't being monetized and every analyst on Wall Street couldn't figure out how Facebook was going to make its money back.

Fast forward to 2014. It is more than two years later and Instagram remains extremely popular. Recently, it was announced that with 300 million active users, Instagram tops the 284 million active Twitter subscribers. In addition, Instagram now runs ads. It would seem that Facebook's purchase of the site was a timely one after all.

So what is Instagram worth these days? A previous calculation run by Citigroup valued the site at a staggering $19 billion. But as they say on those late night informercials, "Wait! There's more." The huge money center bank believes that if Facebook can fully monetize Instagram, the latter could bring $2 billion a year into Facebook's coffers. With all this in mind, Citigroup currently places a value of $35 billion on Instagram.

Keep in mind that because it is not a public company with shares trading all day, pinning a value on Instagram is far from being an exact science. Still, there is no denying that Facebook has made an incredible investment and is sitting on a huge paper profit. 

Thanks for the tip!

source: @TheStalwart, TechInvestorNews

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8 Comments

1. Nine1Sickness

Posts: 896; Member since: Jan 30, 2011

Who knew pictures of food was worth more than the food itself?

4. Tritinum

Posts: 471; Member since: May 06, 2014

Pictures of yourself are worth more than yourself :|

2. fouadqr

Posts: 326; Member since: Nov 21, 2012

I need 1 million ..

3. Derekjeter

Posts: 1467; Member since: Oct 27, 2011

I can't stand Facebook, Instagram..... I Don't get the point of people posting pictures of food, or talking to other people online everyday. Our country is going to sh!t!!

11. _PHug_

Posts: 482; Member since: Oct 11, 2011

I don't know what's worse. Facebook, Instagram, Twitter or loser D bags who pretend to be famous people online while bitching about the internet or their country.

8. 0xFFFF

Posts: 3806; Member since: Apr 16, 2014

$35 billion for all those naked pics and intimate details of peoples' lives. It's probably not a bad price, less than $1/pic :)

12. NexusX

Posts: 613; Member since: May 16, 2013

Apparently this is how these analysts caculate the value of Instagram, based on the number of pictures posted...

9. AfterShock

Posts: 4146; Member since: Nov 02, 2012

Smh, Wtf? Add my country to that list of gone to sh1t too. This is unbelievably crazy like Facebook, I do not see the cake.

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