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.

Comments

Bubblegram reaches 100 billion chucky tokens

[xack]

Been there seen that. We just had the cryptocrash and now we are looking for a new breed of tulip to plant.

Re:Bubblegram reaches 100 billion chucky tokens

[ceoyoyo]

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?

A better way to look at valuation

[Dzimas]

If Boeing went out of business tomorrow, there would be a global aircraft shortage. If Instagram unplugged its servers, the world would continue unaffected.

Re:A better way to look at valuation

[Anonymous Coward]

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.

Re:A better way to look at valuation

[ceoyoyo]

A billion food bloggers and selfie-takers just felt a disturbance in the force....

Re:A better way to look at valuation

[sinij]

The value of the company like Instagram is what they know about you, not what they do.

Instagram knows about you a lot more than Boeing, and if Instagram went bankrupt A LOT of data would be sold to the highest bidder. Consequences of such data release would be unpredictable.

Re:A better way to look at valuation

[jellomizer]

The part of Instagram that is its value, is the number of young customers on its site, who are the future economic drivers.

Lets say Exon Mobile went out of business tomorrow, Millions if not Billions of people will be affected as they have the immediate need for fuel, and Exon Mobile is a major producer the loss of the company would cause a short term set of problems until competitors can ramp up to meet demand.

Now if Solar City went out of business that would probably drive down Solar Power Adoption, but will not cause any major problems. Those with Solar Panels will still work, those without can continue on with their lives. However its loss would slowly affect the future. Without Adoption of Affordable Clean Energy solutions we will be increasing pollution, which will cause other economic factors.

Instagram is how young people communicate, Facebook is how us older people communicate. Killing Instagram today, could mean today's kids when they get into the market and want to communicate with business contacts will probably be split up across many competing services.

Re:A better way to look at valuation

[eepok]

Instagram is how young people communicate, Facebook is how us older people communicate. Killing Instagram today, could mean today's kids when they get into the market and want to communicate with business contacts will probably be split up across many competing services.

Let's not over-inflate Instagram or Facebook as general "communication". It's how people chat about less-important things. Yes, some conversations have significant value, but neither platform is built to facilitate thoughtful conversation and thus it doesn't happen to the extent people like to think it does.

If Facebook and Instagram were to die, people would find another place to chat. Communication would continue on, unabated, via email, phone, forums, in-person conversation, and the like.

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[account_deleted]

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Headline written by financial incompetents

[Anonymous Coward]

Instagram is not "worth" $100B. Here's how non-public valuations work (i.e., private companies or business units of public companies that aren't subjected to a stand-alone market trading test): analysts arbitrarily make them up based on what they THINK could POTENTIALLY happen. Especially in tech, rampant lying and fairy tale projections drastically impact the valuations.

Some generally accepted classic valuation methods would be 2-3x revenues or 3-5x EBITDA. Is Instagram producing $33B in annual revenues? Is it netting $20B in profit?

Even stand-alone public securities can be wildly over-inflated by the market's trade valuation (market capitalization) because of phony financial wizardry by the Fed.

This is all Wall Street / Silicon Valley BS