Facebook Exploring Revenue Sharing Models as Incentive for User Content Creation

Ads on Its Social Platform Instagram Expected to Bring in $1.53 Billion This Year

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Facebook wants to give its users an incentive to create more content for the social media site.

To do that, it's considering sharing revenue generated from news, sports, celebrities and other content, said Carolyn Everson, vice president for global marketing solutions at Facebook.

"Content is incredibly important on Facebook and Instagram," Ms. Everson said in an interview Wednesday on Bloomberg TV. "We want to be a major distribution platform and we are trying to find different ways to help content producers monetize that content. We are exploring revenue sharing models."

With its 400 million active users, the rate of consumer adoption of Instagram is actually at a faster pace than Facebook was in its early days, Ms. Everson said. Many Facebook advertisers are starting to use Instagram, generating crossover between the two platforms, she said.

Analysts have pegged Instagram as a key source of growth for Facebook. Instagram ads are expected to bring in revenue of $1.53 billion in 2016, or 15% of Facebook's total ad sales, according to eMarketer.

On Tuesday, Instagram unveiled tools to help businesses differentiate themselves from regular consumer users in a bid to help drive advertising revenue. The platform has more than 200,000 advertisers, the majority of whom are small businesses, Marne Levine, chief operating officer, said in an interview Tuesday.

While Facebook Chief Executive Officer Mark Zuckerberg has made virtual reality increasingly important with the Oculus Rift headset, Ms. Everson said that Facebook doesn't know what the business model is yet.

"Of course we're selling the product and over time we will have potential models that could look like advertising," she said. "We have 50 programmers building content. We are selling the hardware and we will look to see if there are other monetization models."

-- Bloomberg News

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CORRECTION: An earlier version of this Bloomberg News story said Instagram, not Facebook, was exploring revenue sharing.