Without Facebook, Instagram Valued at $100 Billion
Did Facebook Inc. (FB) purchase Instagram for cheap? Recent valuations say so. A new estimate reveals that if Instagram were a standalone company, it would have been worth $100 billion today, according to the data compiled by Bloomberg Intelligence.
The photo-sharing service recently hit 1 billion monthly active users, and the steadily increasing user base is expected to shoot revenue past $10 billion over the next 12 months. While parent company Facebook is reportedly losing younger audiences, its loss has been a boon to Instagram and other social media services including Snap Inc.'s (SNAP) Snapchat, owing to features that better appeal to younger people. (See also: Aging Facebook Losing Teens: Pew Research Survey.)
While Facebook continues to grow and has surpassed the 2.2 billion user milestone, Instagram is gaining new users at a rapid pace and is on course to get 2 billion users on its platform over the next five years, the study suggests. During the past year, Instagram contributed 10.6% to revenues at Facebook, per eMarketer data, while over the next year it is expected to account for around 16% of the parent company's revenue. Instagram's future growth may be accelerated by the recently launched IGTV, an iOS- and Android-supported app-based video hosting and sharing service that will compete head-on with Alphabet Inc.'s (GOOGL) YouTube service.
Also at BGR, The Mercury News, and Business Insider.
Related: Facebook/Instagram vs. Twitch and YouTube
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Instagram is targeting one of YouTube's weaknesses with plans for long-form video
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[...] The news of the Facebook-owned platform embracing longer videos was first reported by The Wall Street Journal, which said Instagram would soon allow users to upload videos up to 60 minutes to their profiles. TechCrunch added on Thursday that Instagram was talking to social media influencers and publishers to create shows for an upcoming section for dedicated-to-video content, similar to Snapchat Discover.
Instagram Co-Founders to Step Down From Facebook
The two co-founders of Facebook Inc.'s popular Instagram app are stepping down, a move marking continued tumult at the social-networking giant.
The co-founders—Kevin Systrom, Instagram's chief executive, and Mike Krieger, chief technology officer—clashed with Facebook executives over the extent of Instagram's autonomy in recent months, according to people familiar with the matter. Earlier this year, Chief Executive Mark Zuckerberg shifted a senior Facebook executive, Adam Mosseri, over to Instagram in anticipation that the founders might leave, one of the people said.
Among other things, Facebook officials, including Mr. Zuckerberg, clashed with the co-founders over growth tactics and how to more rapidly expand the photo-sharing app's user base, another person said. Senior Facebook officials had known the two men were frustrated working within a large company and had begun making preparations for them to leave, another person familiar with the matter said.
Also at NYT, The Atlantic, and Gizmodo.
Related: Facebook's Instagram Valued at $100 Billion (It Was Purchased for $1 Billion)
(Score: 2, Insightful) by Anonymous Coward on Thursday June 28 2018, @09:07PM
The tech hyper-valuation is the real bubble we should be worried about. BTC is more like the door to door salesman con-artist. My guess is tech has been massively propped up by governments so we can make everyone Safe(tm).
(Score: 5, Insightful) by bob_super on Thursday June 28 2018, @09:16PM (9 children)
Silly question: How dumb of a society are we, that something so useless and easily replaced can be worth so much ?
Yes it connects advertisers to people under the guise of posting pictures, generating revenue, and it connects people. But if it vanished right this instant, what impact would it have on the economy or anybody not working there ? Nada. People would get confused for a second, and start using an alternate right away. How can it be worth so much if so few would care/be impacted at all if it wasn't there?
(Score: 1, Funny) by Anonymous Coward on Thursday June 28 2018, @09:19PM (1 child)
You're surrounded by stupid people.
An equal vote by unequal people makes no sense.
(Score: -1, Troll) by Anonymous Coward on Thursday June 28 2018, @10:19PM
That is a racist statement....Afro-Americans votes are worth as much as other Americans.
(Score: 0) by Anonymous Coward on Thursday June 28 2018, @09:24PM (2 children)
Maybe one day we'll have enough "woke" people that going "mooooo" or "baaaaaah" at someone when they get sucked into a privacy hellhole like FB will actually make them ashamed of their ignorance. They will ask what alternative there is that protects them from the evil marketers and we will quickly populate alternatives that respect freedom and privacy.
Woops I just woke up, I type pretty well when taking a nap!
(Score: 2) by frojack on Friday June 29 2018, @12:13AM (1 child)
As far as I'm concerned, Facebook RUINED Instagram, and they ruined its potential to continue to make money.
And they did so just as Instagram had figured out how to monetize its platform in the least intrusive way.
But to your greater point, yes, photo share is something easy to do, and the bigger you scale it, the less valuable it is to the users.
I might be willing to share a few pics with actual friends, but sure not willing to take world plus dog on my road trip, or to Grandads 98th birthday.
Facebook already had photoshare working before Instagram. They didn't NEED Instagram, they FEARED Instagram.
No, you are mistaken. I've always had this sig.
(Score: 1, Insightful) by Anonymous Coward on Friday June 29 2018, @12:15AM
You might do it if you were a THOT who could monetize it.
(Score: 1, Touché) by Anonymous Coward on Thursday June 28 2018, @09:30PM
Narcissism is big money.
(Score: 5, Informative) by martyb on Thursday June 28 2018, @09:49PM (1 child)
Short answer: Network effect [wikipedia.org].
Longer answer: So long as there are people 'providing' stuff that people want (be it pictures, blog posts, etc.) and there are people who want to consume it, there's going to be a desire by the consumers to track down the new location where the producers post their stuff.
Different answer: As interesting as the details of any given 'product' or 'response' may be, and how much that data can be used to target the participants for showing them advertisements, there is also that pesky metadata to watch out for, too.
Back when the US government was making a big noise that it was not listening in on people's conversations, but only gathering metadata, there was this insightful article posted which I cannot too highly recommend: Using Metadata to find Paul Revere [kieranhealy.org]. it leverages something that many people can understand and presents a straightforward walk-through of how simple it is to glean information from just observing the participants.
I find the article no less instructive and informative than it was when it was written 5 years ago.
Wit is intellect, dancing.
(Score: 2) by takyon on Friday June 29 2018, @03:12AM
Big GET #700000 NETWORK EFFECT
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 0) by Anonymous Coward on Friday June 29 2018, @10:35AM
Silly question: How dumb of a society are we, that something so useless and easily replaced can be worth so much ?
Ivanka Trump?
(Score: 5, Insightful) by Appalbarry on Thursday June 28 2018, @09:48PM (5 children)
Nortel anyone? Pets.com? How can anyone believe that any web site (Amazon.com and Alibaba being the possible rare exceptions) is worth $100 Billion? In what universe can Instagram do anything that would generate enough income to make that plausible?
What is it about tech that makes investors so stupid or gullible?
(Score: 0) by Anonymous Coward on Thursday June 28 2018, @10:13PM (3 children)
Advertisers. They throw around huge sums of money, frequently 20% of their total business expenses! Now whether it translates to tangible profits is a separate question, but they seem to think so.
"Advertisers" covers every aspect of selling user data for profit. Governments would be more like reverse advertisers, give them the data so they know who to lock up. I bet FB makes a pretty penny selling user data to oppressive regimes.
(Score: 2) by frojack on Friday June 29 2018, @12:20AM (1 child)
How long does the concept that you can keep on pushing advertising in people's faces persist? (ignoring the fact that adblockers are a thing).
This whole thing has got to come crashing down someday.
No, you are mistaken. I've always had this sig.
(Score: 3, Interesting) by Arik on Friday June 29 2018, @03:41AM
If laughter is the best medicine, who are the best doctors?
(Score: 0) by Anonymous Coward on Friday June 29 2018, @03:43AM
"Advertisers"? Or the US Government funneling $$$ to FB and Google for their spy work?
(Score: 2) by takyon on Friday June 29 2018, @12:02AM
At least Pets.com had a happy ending [wikipedia.org].
[SIG] 10/28/2017: Soylent Upgrade v14 [soylentnews.org]
(Score: 5, Insightful) by edIII on Thursday June 28 2018, @10:28PM
What percentage of that are fake accounts, bots, .etc? I had Facebook for about 6-7 months while I played Farmville with my younger relatives. I don't think the shareholders should bank on Abdul BigDick Jabar (or whatever I named it) bringing any revenue in anytime soon. Which know makes me realize I might have associated them with what appears to be a terrorist account :)
100 billion is absolutely insane. Revenue is 10 billion, so that would be a valuation for 10 years of the same revenue? I'm not a Wall Street peckerhead so I don't know the rules of their corrupt games. That seems massively stupid, especially when they could be knocked off at any time by a company better providing what people want. This is the same company that had a panicked reaction to a major celebrity dissing Instagram and leaving it. They would need to survive the next 10 years in the information technology sector. Shit can change radically in just a few quarters. 1 year in this industry is like 5 in any other. Imagine the stupidity of evaluating the value of MySpace over 10 years? They would've been very wrong, and I don't think you can predict what will be in technology in 10 years.
The company itself has no assets (that I know of) beyond whatever meaningless software patents they have, buildings purchased, etc. Meaning, it's not like a major industrial megacorp or a military industrial complex corporation that has real physical products in constant demand.
This is why normal people conclude that Wall Street is based on bullshit, or the appearance of that bullshit. 100 billion? They're smoking something.
Technically, lunchtime is at any moment. It's just a wave function.