Instagram revenue projected to hit $5.8 billion in 2020 – Analyst

insta

Facebook’s decision to buy Instagram looks smarter and smarter each year.

Instagram, the fast-growing photo-sharing network, is projected to generate about $700 million in revenue this year and $5.8 billion in revenue in 2020, according to new estimates from analysts with Cowen & Co.

That surge in sales, according to the report, is based on Cowen’s surveys of user and advertiser interest as well as projections for Instagram’s user numbers to more than double to 680 million by 2020 and for larger advertisers to follow.

“Given the user scale, adv. interest, shifting TV ad spend to Digital and FB’s monetization capabilities, we are more confident in our Instagram revenue ramp from $0.7BN in ’15 to $5.8BN in ’20,” the analysts wrote in the report, a copy of which was provided to Mashable.

Facebook agreed to buy Instagram in 2012 for $1 billion — though it ended up paying much less— and waited until late 2013 to introduce advertisements and gradually start monetizing the service.

Instagram, Cowen’s analysts say, is now worth about $33 billion, roughly on par with anotherrecent estimate from Citigroup. If that sounds high, consider that Instagram now has more monthly active users than Twitter, a company with a market cap of about $30 billion.

The report came out the same week that Snapchat, which Facebook tried to buy in late 2013, reportedly received funding interest at a valuation of up to $19 billion.

Facebook stock ended the day up about 3.5%, helped in part by the positive projections in the report

Source: Mashable

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s