Facebook is in charge but numbers don’t lie
According to Bloomberg Intelligence (as reported by Fin24), if Instagram were a stand-alone company, it would easily be worth more than $100bn, making 100 times as much in returns for a company that was purchased six years ago.
Bloomberg Intelligence analyst, Jitendra Waral, reported that Instagram had over a billion active monthly users and is expected to haul in more than $10bn in revenue in the next year.
Facebook’s loss is Instagram’s gain
The same sentiment could not be shared on Facebook. According to Fin24, Facebook’s shares fell by 3.7% to $194.23. Although the parent app has already exceeded two billion active monthly users, it has failed to grow any further than it has in the United States, with Instagram well on its way to reaching that user activity mark.
Instagram recently announced its latest feature, Instagram TV (IGTV), meaning that it could account for more than 16% of Facebook’ revenue in the next year. This long-form content addition is a great move for the revenue the app is set to receive from ad spend. However, in 2918, the bulk of the app’s income will still come from newsfeed ads, according to Jitendra.
Instagram TV vs. Youtube
The interesting thing is how this will affect YouTube’s standing as the premium long-form content platform. Creators will have their own channels with users able to watch with convenience from their phones. It is clear that this is a move from Instagram to prolong their revenue growth and introduce new ways to increase ad spend.
With more than half of smartphone users streaming video content on their phones, it will be interesting to see how the Google-owned Youtube platform will compete against Instagram’s latest long-form vertical video content option.