Instagram on path toward $10M in annual revenue
Photo-sharing site worth $100 billion, Bloomberg estimates
In 2012, you probably wouldn’t have been out of place if you thought Facebook was crazy for paying $1 billion for photo-posting site Instagram. After all, Facebook was Facebook and was about to go public, and Instagram was a place where people put photos of their cats, and themselves posing in front of bathroom mirrors.
Six years later, there’s still a lot of that taking place on Instagram. But all of that has also been a boon for Instagram, and has made Facebook look pretty smart for acquiring the company for “only” $1 billion.
That’s because Instagram could be worth $100 billion today as a standalone company, according to data from Bloomberg Intelligence. In a new report, Bloomberg Intelligence estimated that Instagram could also surpass $10 billion in annual revenue in the next 12 months, with most of those sales coming from the platform’s newsfeed ads.
Instagram’s gains are like the child who eventually does better at something that his parents were superb at. Instagram has already surpassed 1 billion monthly active users (or almost half the 2.2 billion such users that Facebook has) and its user base is growing at a faster rate than that of Facebook. Also, it helps that Instagram’s audience tends to be younger than Facebook’s, and it’s those younger users who companies prefer to court with their advertising dollars.
Bloomberg Intelligence also estimated that Instagram could reach that 2 billion monthly average user point within five years. To help with its growth plans, Instagram last week launched a new app called IGTV (for Instagram TV) that will allow its users to post videos longer than one minute, and potentially up to one hour, depending on the size of an Instagram user’s audience.