The popular photo sharing app Instagram part of Facebook (NASDAQ: FB) is worth more than $35 billion. Instagram was acquired by Facebook two and a half year back at a valuation of $1 billion in cash and stocks.
But it seems the price was well paid by Mark Zuckerberg, self-made billionaire and Facebook CEO & Founder before taking his own company to the market.
Citi Group analyst Mark May has written in a report to the clients that “Not only is Instagram’s audience now larger than Twitter but its users are ~1.8x more engaged, and user growth has been greater. Instagram is at the early stages of rolling out advertising, but we believe brands have and will find it an effective channel” reports Forbes.com
Citigroup has also raised the target price of Facebook from $86 to $91 taking the valuation of the Social Media giant to a massive $266 billion. Instagram has been a mine of Gold for Facebook, returning them over 35 times the initial investment in less than 30 months. The current valuation of Instagram is more than other popular social media platforms like Twitter, Yelp or LinkedIn.
Instagram is an online mobile photo sharing, video sharing and social networking service which helps user to take photos and share them on various social media sites such as Facebook, Twitter, Tumblr and Flickr. Instagram has been made popular by popular celebrities such as Kim Kardashian who are die-hard fan of Instagram app and use the media to connect to their worldwide fan base.
Instagram is currently the most popular image sharing service and has more than 300 million registered users. It even surpasses Twitter in the number of users using the site per month. Instagram has also recently tried and cleared the spam accounts from their site. This activity has led to massive reduce in the number of followers of popular accounts on Instagram. With this valuation Instagram now comprises roughly 16% of Facebook valuation. Making it most important part of the social media empire. Facebook has recently started ads on the Instagram platform. Analysts believed that the service is currently under monetized.
An Instagram user typically spends some 21 minutes as opposed to just 7 minutes of a twitter user per day. This makes Instagram a 3 times more powerful online social media platform and put it an advantage in terms of more visibility to the advertisers.
Kevin Systrom the founder and current CEO of Instagram has some insights in the plans of the social media platform “We’ve just started monetizing. We have a lot to prove before we’re, you know, worth many billions of dollars.”