Facebook's Instagram is estimated to be worth more than $100 billion, if it were a stand-alone company, marking a 100-fold return on the app's purchase price in 2012, according to a report from Bloomberg Intelligence.
The photo-and-video-sharing platform, which reached 1 billion monthly active users earlier this month, will likely nudge revenue past $10 billion over the next 12 months, Bloomberg Intelligence analyst Jitendra Waral wrote in a report Monday. Instagram is attracting new users faster than Facebook's main site and is on track to exceed 2 billion users within the next five years, Waral said. While the social network already has surpassed that milestone, Instagram's audience is younger than its parent, making it more attractive to advertisers. And unlike Facebook, Instagram is still growing in the U.S.
Instagram could account for about 16 percent of Facebook's revenue over the next year, up from 10.6 percent last year, according to eMarketer data. The unit announced the addition of Instagram television, or IGTV, last week as an attempt to catalyze future growth. Most of Instagram's 2018 revenue growth will still likely come from its newsfeed ads, as the TV platform is still developing, Waral said.
Facebook shares slipped 3.7 percent to $194.23 at 2:12 p.m. in New York, as the broader market also declined. The stock has gained 10 percent so far this year, compared with a 1.5 percent gain in the Standard & Poor's 500 Index.
-- Bloomberg News