Instagram is worth a WHOPPING $35 Billion!

According to a new estimate by a Wall Street analyst, the social media platform could be worth that staggering amount indeed.

Mark May issued a new estimate for the popular app which was substantially larger than the bank’s prior $19 billion valuation, additionally May announced that Instagram had now reached more than 300 million total users worldwide.

“While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized,” Quoted from May’s research report.

The lucky owner of Instagram (Facebook) only paid $1 billion for the photo-sharing app in a cash-and-stock deal, making a current profit of over $34 billion, not bad eh?

When they bought Instagram in 2012, critics of the social network said the deal was another sign of Silicon Valley overreach and that it would be their riskiest move yet.

According to Citigroup analysts, Instagram now accounts for around 16 percent of Facebook’s roughly $221 billion market value.

If you think this amount is staggering then just to let you in on a secret, Facebook’s move to make money from Instagram is only just getting started. Citigroup analysts believe the app could soon be a larger and more significant contributor to Facebook revenue.

“While Instagram is still early in monetizing its audience and data assets and its financial contribution to FB is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2bn in high margin revenue at current user and engagement levels if fully monetized,” they wrote.

Although they don’t state it obviously, analysts believe that Instagram is now worth more than the popular social media company, Twitter, which is currently valued at $23.5 billion.

“Not only is Instagram’s audience now larger than Twitter, but its users are 1.8 xs more engaged, and user growth has been greater,” they write.

“Instagram is at the early stages of rolling out advertising, but we believe brands have and will find it an effective channel.”

The valuation figure could potentially increase as May expects Instagram to continue to grow and gain more users. By the end of 2015, he has predicted that Instagram could have approximately more than 420 million users.

Ben Hawkshaw-Burn
Ben Hawkshaw-Burn
Co founder of digital marketing agency PurpleFruit and absolutely obsessed with search, social and web marketing. I love technology almost as much as I hate it …... I am totally mesmerized by how technology continues to change consumer behavior …... and even more passionate about staying ahead of that curve. I really thrive on working with passionate Technology-based companies who are determined to stay cutting edge.