Facebook proves to us that acquiring Instagram was a smart move. The photo sharing social network Instagram is projected to generate approximately $700 million in revenue this year and $5.8 billion in revenue in 2020 according to new estimates from analysts with Cowen & Co., as pointed out by Mashable.
Facebook acquired Instagram in 2012 for $1 billion and started monetizing the service when it introduced advertisements in 2013. The report also added that the surge in sales is based on Cowen’s surveys of user and advertiser interest. It adds that Instagram’s user numbers could double to 680 million by 2020 and in turn, attract larger advertisers. Instagram has also recently introduced endlessly looping videos which is clearly is a move to please advertisers.
“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.
Earlier reports suggest that Instagram is now bigger than Twitter which has over 300 million active users, sharing over 70 million photos and videos each day. Four-year-old Instagram crossed 200 million users in March last year. This proves that the company has grown a whopping 50 percent in the past.