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Instagram Is Estimated To Be Worth More Than $100 Billion (bloomberg.com)
An anonymous reader quotes a report from Bloomberg: Facebook's Instagram is estimated to be worth more than $100 billion, if it were a stand-alone company, marking a 100-fold return for the app purchased in 2012, according to data compiled by Bloomberg Intelligence. The photo-sharing platform, which reached 1 billion monthly active users earlier this month, will likely help nudge Instagram revenue past $10 billion over the next 12 months, Bloomberg Intelligence analyst Jitendra Waral wrote in a report Monday. Instagram is attracting new users faster than Facebook's main site and is on track to exceed 2 billion users within the next five years, Waral said. While the social network already has surpassed that milestone, Instagram's audience is younger than its parent, making it more attractive to advertisers. And unlike Facebook, Instagram is still growing in the U.S.
Airbus couldn't ramp up production fast enough to prevent manufacturing shortages in the short to medium term. Worse, there would be no competition to push innovation and force competitive pricing.
You might be a bit optimistic on Instagram profit. I couldn't find any actual numbers but social media companies don't seem to have quite the profit margins you'd think they should. They love to talk about revenue though.
The bigger problem: P/E of 30 isn't so bad for a rapidly growing company with lots of potential. But what about a company who's users already comprise a large fraction of the population of the planet? How much can Instagram actually grow? And if it does manage to double it's profits, is 15-20 years for breakeven (of a social media company) reasonable?