Instagram Is Estimated To Be Worth More Than $100 Billion (bloomberg.com) 114
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.
Bubblegram reaches 100 billion chucky tokens (Score:4, Insightful)
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Been there seen that. We just had the cryptocrash and now we are looking for a new breed of tulip to plant.
I wouldn't call crypto a tulip scenario; when the bubble burst on bitcoin it lost 2/3rds of it's value but was still many times more valuable than where it had been a year before that... it's a long slow decline with some ups for bitcoin now.
I wouldn't call Instagram to be a tulip scenario either as their is no hype to invest in it,etc. "e products" are very volatile though, and Instagram could easily be worth half or less their value in a year... that's the way services like that go. Not that I expect t
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I don't see any point or purpose for Instagram. If I want to share photos, I have my web server or Smugmug. Photo editing? GIMP or other tools. Need an app? There are commercial ones for a few bucks which respect privacy.
I understand it is doing well, but what can Instagram do that other things cannot, other than slurp your data for resale in bulk, which is not something I consider a "feature" for me.
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I don't see any point or purpose for Instagram. If I want to share photos, I have my web server or Smugmug. Photo editing? GIMP or other tools. Need an app? There are commercial ones for a few bucks which respect privacy.
I understand it is doing well, but what can Instagram do that other things cannot, other than slurp your data for resale in bulk, which is not something I consider a "feature" for me.
Well I wouldn't create an account with Instagram for the pure reason that it is owned by Facebook and I refuse to touch anything Facebook.
Re: Bubblegram reaches 100 billion chucky tokens (Score:1)
Itâ(TM)s strength is that it is effortless.
You can take a picture (and increasingly, on instagram, a vertical video) with your phone, tap your screen a few times to crop. process and share. Soon after, your friends, family and other followers are effortlessly hitting the â(TM)¥ï button and youâ(TM)re receiving dopamine hits from the social engagement.
Its apparent frivolity may be its strength. Itâ(TM)s easy to use and a photo update is a lot faster to scan than a tweet or an ema
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Here it's as with anything infected with Facebook, Google or Twitter, the user is the product.
Bloomberg figured out you can make this much money spamming the soon to be 2000 million idiots that have handed over their soul.
That requires for the next few years on average US$50 of potential profit per subscriber, it'll be less for the Africans and Indians but more for the Europeans and Nor
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If their revenue estimates are even somewhat accurate then it's hardly tulips, 8x current revenue (say 30x net profits?) is hardly a huge premium for a company that is still growing rapidly.
Re:Bubblegram reaches 100 billion chucky tokens (Score:4, Informative)
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?
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Facebook's net profit margin is 27%, gross is 47%, I assumed that Instagram would be at least as good.
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You might be right, although Facebook has only reached those dizzying heights in the last few years... as their growth slowed. In 2015 their gross was half what it is now. Software companies can rack up high margins once all there is to do is keep the servers ticking over and do a cosmetic release now and then.
Even 30x though... for a company with growth potential fine, but Instagram's revenue is pretty tightly coupled to the count of wealthy eyeballs, and they've already got a good chunk of the eyeballs i
Re: Bubblegram reaches 100 billion chucky tokens (Score:3)
People think Bitcoin is like tulips. They are right.
People think there was a bubble in Dutch tulips. They are mistaken. There was a bubble in tulip FUTURES.
Futures are like the CDOs and other derivative instruments that brought about the 2008 financial collapse.
Tulip futures bubbled for a season. Bitcoin has been rising for a decade.
You are a low information voter, too, I bet...
Re: Bubblegram reaches 100 billion chucky tokens (Score:2)
Why would you accept dollars? To burn? You know dollars are backed by the U.S., right? If there's no U.S., dollars don't have value, similar to the way that if there's no Internet, Bitcoin has no value.
So, the question is, which will sustain an apocalypse: the United States or the Internet?
Ha! (Score:1)
But seriously, how much is it worth?
Re: Ha! (Score:2)
However much you can sell it for on the open market.
A better way to look at valuation (Score:5, Insightful)
If Boeing went out of business tomorrow, there would be a global aircraft shortage. If Instagram unplugged its servers, the world would continue unaffected.
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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.
Comment removed (Score:4, Insightful)
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Sooooo Boeing doesn't bleed tax money?
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What? They don't have incredibly expensive spare factories and productions lines sitting around collecting dust just on the off-chance?
I blame the MBAs
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Actually you're very wrong. Boeing can't even keep up with demand for their own product. How the f*** do you think other manufactures would be able to just step in and make up for the difference?
Hint: Look at the wait-list for 787's [wikipedia.org].
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There are other social media companies too. And its much easier to transfer between them.
Yeah, a few people that don't have backups would be fucked, but those people are inconsequential. Anyone that cares about their photos has local backups.
Re:A better way to look at valuation (Score:4, Funny)
A billion food bloggers and selfie-takers just felt a disturbance in the force....
Re:A better way to look at valuation (Score:4, Interesting)
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.
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Boeing probably knows more about me than Instagram does. After all, I've flown on airplanes, and they probably collect data from each flight.
Re:A better way to look at valuation (Score:4, Interesting)
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 (Score:2)
And the fact those contact lists will inevitably split is why neither will ever succeed in become a de facto form of communication. Instagram's growth is a flash in the pan. Social networks grow into unusability. It's inevitable.
Re:A better way to look at valuation (Score:5, Insightful)
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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You're a special kind of dumb fuck if you're old enough to know better and still use Facebook to communicate.
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I work in IT, and it feels like there is a dot com bubble happening with valuations becoming ludicrously high, like amazons' 266+PE, NFLX PE 239. google fb, msft 27-30 PE.
And whle sectors of highly technical manufacturing, MAGIC level manufacturing, is rolling in sub 8 PE land.
Re: A better way to look at valuation (Score:2)
I wonder how it stacks up if you include dividends. Lots of the older, stable industries (including MS to be fair) pay out decent dividends which keeps the P/E down.
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Hello? Pictures of food do not share themselves.
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Understatement. It'd be positively livid!
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It's all about you promoting your friend who probably doesn't even know you exist.
I'm not friends with either Casey Neistat or Casey Neistat's wife's model. I was pointing out an example that Instagram would have on the world of modeling if it was to shutdown. That is a more relevant point to Instagram than Boeing shutting down.
The numerous people like you trying to ecke out a little extra cash from their blogs and crap are a negative externality on every legitimate business on the internet that allows free form posting in any capacity.
My Slashdot account has no bio, no sig and no external. What blogs have I promoted in my comments?
cre!mers
If you have something to say to him, you can leave a message on his channel [youtube.com] Assuming, of course, he haven't already banned you.
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Arguably, the world might even become a little bit better place. /crankyoldman
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Actual importance has never been a factor in valuation -- otherwise the most valuable thing on the planet would be air, which is proverbially free.
This is an argument against the attitude that income and wealth are somehow indicators of social contribution. A park ranger or trash collector contributes more to society than a senior engineer at Instagram, but doesn't make anything like the money. People who can fill the role are rarer, and therefore command a higher market price, even though they're creati
You mean 100 billion apps! (Score:1)
Only apps can app apps, and Appstagram is worth 100 billion appy app apps, NOT LUDDITE dollars!
Apps!
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Thank you, App Guy!
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Yeah; bring back PizzaAnalogyGuy, I say.
Does that make them suckers? (Score:1)
And this is why it isn't always the best idea to sell out. If instagram just kept doing it's thing and let facebook faceplant then they would be the #1 platform instead of just facebook's #1 best buy.
Re: Does that make them suckers? (Score:2)
Or Facebook would have found another way to crush them. Just look at SNAP.
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Maybe, maybe not. Snapchat turned down an offer. And FB took them on. Whereas Instagram was grown by FB.
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Is that is true (Score:2)
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The valuation is in line with the 29x current earnings of Facebook. Take the same 27% net profit margin and multiply by the revenue and multiply by 29 and you get $78.3B, a 13% premium for a company with a faster growth rate and better underlying fundamentals (younger audience in this case) is pretty small.
Instagram is estimated to be worth something? (Score:2)
So someone is estimating that each and every Instagram user is worth 100 US dollars?
WTF is wrong with wall street?
Re: Instagram is estimated to be worth something? (Score:3)
They are susceptible to advertisers who convinced them ads are valuable.
Between marketeers, investors, and corporate customers, there's a whole lot of mass delusion going on in the ad space. Frankly, I think it's a sign that corporations are making too much profit, and their leadership is too incompetent to know where to re-invest, so they just dump it into marketing.
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The true brilliance of marketing. All that psychological manipulation isn't actually to convince consumers to buy stuff, it's to convince business that you can convince consumers to buy stuff.
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The chasm between them and reality is now widening at such a rate that it's unlikely to snap back.
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I still don't understand how users would be "worth" $4/month in the first place. If the internet was free and devices were free too, I couldn't complain.
But right now, advertisting companies should be paying users to display ads on their devices. It's our bandwidth, our monthly quotas, our devices.
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If you're selling a $399 consumer widget, and for people interested in the category of your widget tend to buy them at a rate of 2% based on exposure, I could pay $200 and pretty much guarantee a sale, on Instagram.
Ad companies indirectly pay users for displaying ads - they fund services like Instagram, Facebook, Google Maps, etc. via paying Facebook and Google for ads to you. Would you prefer to pay a $9.95/month subscription to Google Maps? Pay for GMail/Google Drive/tools $15/month like you pay for Mic
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I wish people would stop paying ads for Facebook, Twitter and Instagram, yes.
ProTip (Score:1)
You could double your perceived value if you'd FIX YOUR NON-PERSISTENT PINCH-ZOOM RETARDATION!!!
Seriously, UI design is a thing.
No it's not (Score:3)
No one would ever make $100Bn back on Instagram because it would be obsolete before you could ever make enough cash from selling the users' data.
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No one would ever make $100Bn back on Instagram because it would be obsolete before you could ever make enough cash from selling the users' data.
You just shot down your own argument in the same sentence you made it.
What if it's the already-collected users' data that is worth most of that $100B?
Basic Math (Score:2)
Sigh. (Score:3)
"will likely help nudge Instagram revenue past $10 billion over the next 12 months... and is on track to exceed 2 billion users within the next five years"
So you're telling me that you make $5 a user a year? How? Where? Doing what? Who's paying that? Why are they paying that? What are they getting back for that $5?
Advertisers really are a special kind of insane.
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Estimated by who? (Score:3)
Estimated accordingly to which values?
What do they do? (Score:1)
When I last asked someone what Instagram does, their description made it sounds like it's basically just flickr: a photo file hosting service. (Maybe with some bells and whistles?)
I can see how this would be useful to people who don't have hard disks (and hard disks start at around $50 and only get more expensive from there). Or if you want to share your photos on the web, but if you can't get Apache working, flickr or instagram might be a good idea for you too. (But isn't flickr more established?)
None of
How is this possible? (Score:3)
I haven't used the iOS app in some time, but the Android app is a total and utter piece of crap. The people responsible for programming it are about as credible as this estimated valuation.
Yesterday I tried creating a post, and the text wouldn't populate. The image would appear, but no text. Couldn't reply to people either. Yes, it was the latest version. Is this how a $100 billion app is supposed to function?
It's plagued with problems like this, plus so much more is wrong with it - from unreliable and seemingly random notifications to the non-chronological timeline, to inane interaction 'rules' (like how for the longest time to reply to someone you pretty much had to type out their handle - this is finally better at least). The people programming and designing this are being rewarded for just about the worst-functioning app out there. What a world.
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Headline written by financial incompetents (Score:3, Insightful)
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? I