Facebook owns the company, which it purchased two years ago for $1 billion at a user base of 30 million people. That looks like a great bet in hindsight, since Instagram's base has now increased tenfold to 300 million users according to the company last week. To celebrate that milestone, Mark Zuckerberg posted the following:
But those numbers are in flux as millions of fake or bot accounts were expunged this week in what some are calling the "Instagram rapture." According to a visualization,
Justin Bieber alone lost 3.5 million followers, about 15 percent of his total.
But it would seem that Citigroup is undeterred, writing “Not only is Instagram’s audience now larger than Twitter, but its users are 1.8x more engaged, and user growth has been greater. Instagram is at the early stages of rolling out advertising, but we believe brands have and will find it an effective channel.” Instagram, they estimate, now makes up roughly 16 percent of Facebook's $221 billion market value, with Citigroup analysts raising their price target for Facebook stock by $5 to $91. Folks shouldn't forget, though, that not all of Facebook's promising purchases have turned out like Instagram: Whatsapp, which was acquired for $21.8 billion earlier in the year, isn't looking nearly so good in hindsight.
Twitter, too, alleges it has 300 million users. Yet this Instagram valuation exceeds that of Twitter, which is estimated to be worth $23.5 billion. And $35 billion means Instagram now is creeping up on Uber's widely publicized $40 billion valuation, putting it on par with the likes of giants like Time-Warner Cable. Uber has just leveraged that valuation to nab another billion in funding.
In other news, Instagram made headlines by unveiling 5 new filters a few days ago. But the newest filter for the company should perhaps have been rose-colored.
