According to estimate, Facebook's investment in Instagram has increased 100-fold
In April of 2012, most people were stunned to hear that Facebook had agreed to buy picture and video sharing app Instagram for $1 billion. Many felt that Zuckerberg and company had overpaid for what was essentially an app known for its photo filters. And how would Facebook monetize the app? As it turned out, the investment appears to be a grand slam for Facebook with a new report published today by Bloomberg that estimates the value of Instagram at $100 billion.
Instagram has launched IGTV where videos in portrait play for as long as one hour. IGTV is seen as a great opportunity for Instagram to add more advertisers, although newsfeed ads will still be the source of revenue growth for the rest of this year. The app first starting running ads just months after the Facebook acquisition. With a younger demographic than Facebook, Instagram is a more attractive media buy than Facebook is for many consumer goods firms.Instagram has broadened its appeal thanks to its decision to "borrow" the Stories concept from Snapchat. No longer is the app known only as the place to memorialize an appetizing lunch and dinner. And
Just last week, Instagram announced a milestone of sorts; it now has over one billion monthly active users. Based on data from eMarketer, the app will contribute 16% of Facebook's revenue this year, up from 10.6% last year.
Just two and a half years after announcing its purchase of Instagram, Facebook closed on its purchase of messaging app WhatsApp for a breathtaking $21.8 billion dollars. However, we just can't imagine this investment providing Facebook with another 100-fold return.