New data compiled by Bloomberg Intelligence that pegs the valuation of the photo-sharing app Instagram at more than $100 billion represents more than an eye-popping growth trajectory for what was once a 13-person team that got bought by Facebook back in 2012.
That acquisition also arguably represents the luckiest bet Facebook has ever made in the entirety of its existence. What’s more, armed with new data about Instagram’s worth — along with metrics like Instagram recently announcing it’s reached the 1 billion user mark – that should quell any uncertainty about the future looking bleak for Facebook Inc., never mind if the popularity of the blue app and its much-maligned News Feed is waning.
To that last point — “Facebook is social media for old people” was not only a Boing Boing headline in recent days. It’s also a popular bit of conventional wisdom at this point. Just look at Pew’s “Teens, Social Media & Technology” report, which ranked the favorite social media apps of teens in 2018 and put Facebook’s popularity at a middling 51 percent. Below YouTube, Instagram and Snapchat.
Facebook, meanwhile, hasn’t gotten too hung up on all that and honey-badgered its own version of avoiding irrelevance thanks to the fact that it wisely scooped up Instagram for $1 billion. That 100-fold return on its investment has of course given it a massive audience, with analyst Jitendra Waral estimating in a Bloomberg Intelligence report Instagram will catch up to Facebook itself and hit 2 million users in the next five years. Waral adds that Instagram should “be able to double the traffic at a faster pace, as the adoption curve of the platform has outpaced core Facebook.”
Instagram’s Snapchat-killer “Stories,” along with Insta’s just-launched broadcast platform IGTV, likewise point to the service’s future. They also help explain why Instagram’s U.S. users have spent almost as much time this month in the Android version of the app as Facebook users have spent in their app, according to new data this week from SimilarWeb.
Bloomberg Intelligence also cites data from eMarketer that shows Instagram could be responsible for around 16 percent of Facebook’s revenue over the next 12 months.
All of this, you could argue, was probably inevitable. Facebook over the years monkeyed around too much with privacy settings, shoehorned too much into what has become an atrocious app interface, gave people so many knobs to turn and tinker with on each post that people throw up their hands and start to cast around for something simpler. There’s also a degree of irony in the fact that an upstart like Snapchat tried to take on the Goliath of social media, and when Facebook was at its most vulnerable a la Cambridge Analytica and other recent scandals, Snapchat ended up showing Facebook a way forward into a future where the News Feed isn’t so prominent anymore. And behold, not only was Stories born, but Facebook stuffed it into everything it could, like Facebook, Messenger and Instagram.
It’s the social media circle of life. A New York Times headline from last year probably said it best. “Why Instagram is becoming Facebook’s Next Facebook.”
On second thought, hopefully not.