Instagram was acquired by Facebook back in April of 2012 for $1 billion. The acquisition was done when Instagram only had around 27 million users on iOS. However, the company saw over a million downloads n the first day of launching on Android, and Facebook put the pedal to the metal and closed the deal.
According to Citigroup analysts, Instagram, which now has 300 million users, accounts for about 16 percent of Facebook’s round about $221 billion market value.
The $35 billion valuation is considerably higher than the $19 billion a reporting site had formerly estimated. Instagram has surpassed even its most conservative assumptions around user growth and monetization.
“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,” firm wrote.
Instagram also brought their advertising products overseas in 2014, launching campaigns for brands in Canada, the UK, and Australia. In October, Instagram rolled out video ads from a select group of four launch partners.
Instagram started advertising in the U.S. in late 2013 and was without more ado was able to bring in high profile clients such as Adidas, Ben & Jerry’s, Burberry, General Electric, Levi’s, Lexus, Macy’s, Michael Kors, PayPal, and Starwood.
A tech site also estimates Instagram’s ad products could generate up to $2.7 billion in revenue in 2015.