The decision of Facebook to purchase Instagram appear to be smarter and smarter as every year pass by. Instagram, the popular fast-growing photo-sharing network, is seem to generate aroung seven hundred million dollars in its revenue for this year and it will by $5.8 billion by the year 2020. This is based on the study of the analysts with Cowen and Co that has been shown in the chart recently.
Facebook acquired Instagram in 2012 for $1 billion and started monetizing the service when it introduced advertisement in 2013. The report also added that the surge in sales is based on Cowen’s survey of user and advertiser interest. It adds that Instagram’s users numbers could double to 680 million by 2020 and in turn, attact larger advertisers. Instagram has also recently introduced endlessly looping videos which is clearly is a move to please advertisers.
“Given the user scale, adv. interest, shifting TV ad spend to Digital and FB’s monetization capabilities, we are more confident in our Instagram revenue ramp from $0.7BN in ’15 to $5.8BN in ’20,” the analysts wrote in the report, a copy of which was provided to Mashable.
The analysts say that Instagram online is currently worth around $33 billion, approximately on par with another present estimate from the Citigroup. If it sounds that high, considering that Instagram users increase in larger percent every month as compared to that of Twitter, a company that has a market cap of roughly $30 billion.
Report that came out to public the same week suggests that another company in the name of Snapchat, that Facebook attempted to buy before the end of year 2013, reportedly gained funding interest at the valuation of up to nineteen billion dollars. The stock of Facebook, the most popular social networking site with millions of active users across the world, ended up approximately 3.5 percent and assisted in part by positive projections included in the said report.