Facebook (NASDAQ FB) acquired Instagram back in 2012. Instagram is a photo and video sharing platform which is having a huge customer base. Facebook had acquired Instagram for a staggering $1 Billion. As it turns out, this was a very wise move from Facebook. Recent valuations have suggested that Instagram is valued at around $35 Billion.
Citigroup has recently valued Instagram to be worth $35 Billion. Previously, Citigroup had valued Instagram to be around $19 Billion. Citigroup commented that the valuation was done using conservative assumptions regarding Instagram’s future in terms of user growth and revenue generation.
Citigroup believes that Instagram would be seeing faster growth in terms of users in the coming months. The positive projection is also due to the fact that Instagram may have more monetary gains from Social Media properties. Meanwhile, Citigroup has also raised the target for Facebook stock. It has been raised from $86 to $91.
Facebook Inc: Valuations
Citigroup believes that Facebook would start generating non-Facebook revenue streams. These would mostly come from the likes of WhatsApp and Instagram. Instagram is still in very early stages of monetization. They hardly add to Facebook’s revenue streams. However, most analysts do predict that Instagram would be contributing to more than $2bn in revenue in near future, once they start monetizing their services properly.
Citigroup analysts believe that Instagram would generate as much as $2.7 Billion for Facebook in 2015. Facebook had advertised the monetization of Instagram back in October. Back then Goldman Sachs analysts believed that Instagram might generate around $ 400 Million this year itself.
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Facebook Inc (NASDAQ FB) Business News
Facebook FB Stock has been getting positive valuations for some time. The stock is also performing well. Mark Zuckerberg would be looking to get more profit out of WhatsApp and Instagram deals. The revenue generation and user growth both looks good for Facebook and the stock should appropriately respond.
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