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Picture This: Instagram Could Be Worth $35 Billion

1 minute read
The Instagram logo is displayed on a smartphone on Dec. 20, 2012 in Paris, France.
The Instagram logo is displayed on a smartphone on Dec. 20, 2012 in Paris, France.Lionel Bonaventure—AFP/Getty Images
By Fortune

Instagram, the photo-sharing service owned by Facebook, could be worth a whopping $35 billion, according to a new estimate by a Wall Street analyst.

Citi’s Mark May issued a new valuation estimate for the popular app, far above the bank’s prior $19 billion valuation, a loftier view on the asset that May attributed to Instagram’s announcement last week that it had reached more than 300 million total users.

“While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized,” May wrote in a research report.

29 Instagrams That Defined the World in 2014

More from Newroz in Diyarbakir. #newroz #kurds #turkey #amed #diyarbakir #flags #somanyflags
More from Newroz in Diyarbakir. #newroz #kurds #turkey #amed #diyarbakir #flags #somanyflagsScout Tufankjian (@stufankjian) via Instagram
Syrians pray at the metal gate where the head of Husayn (grandson of Muhammad) was displayed during Friday prayer at Omayad Mosque in #Damascus #Syria
Syrians pray at the metal gate where the head of Husayn (grandson of Muhammad) was displayed during Friday prayer at Omayad Mosque in #Damascus #SyriaSergey Ponomarev (@sergeyponomarev) via Instagram
McAllen, Texas. A group of women and two unaccompanied children are detained on a levee. Exhausted and hungry the group appeared relieved to be found. It turned out they had travelled from Guatemala and Honduras together. Part 1 of My film 'The Fence' comes out this coming Monday @msnbcphoto
McAllen, Texas. A group of women and two unaccompanied children are detained on a levee. Exhausted and hungry the group appeared relieved to be found. It turned out they had travelled from Guatemala and Honduras together. Part 1 of My film 'The Fence' comes out this coming Monday @msnbcphotoCharles Ommanney (@charlesommanney) via Instagram
Boarding the bus, sent to greet us, on the tarmac at the airport in Mogadishu, Somalia
Boarding the bus, sent to greet us, on the tarmac at the airport in Mogadishu, SomaliaDaniel Berehulak (@danielberehulak) via Instagram
#AisholPan and her #GoldenEagle in action (#BayanUlgii , #Mongolia )
#AisholPan and her #GoldenEagle in action (#BayanUlgii , #Mongolia )Khasar Sondag (@inomad) via Instagram
Japan’s Nuclear Power Plant Belt: A 65 year old woman Yumiko Aoki works at her rice field during a super hot day, in an extremely depopulating Oku-Izumo in Shimane, one of the nuke-plant prefectures in Japan. All of nuke power plant regions and nearby have faced the drastic depopulation, the shrinking of job market and the aging society. That was one of the biggest reasons nuke reactors were created in such areas, though after the 2011 Fukushima nuke power plant disaster, all reactors have been suspend for the operation. Yet, the Japanese government and many residents of the nuke power plant belt want to resume. #japan’s_nuclear_power_plant_belt #old_people #oku_izumo #depopulation #aging_society #shimane #japan #rural_area #countryside #handy_capped #iphonephotography #photodocumentary
Japan’s Nuclear Power Plant Belt: A 65 year old woman Yumiko Aoki works at her rice field during a super hot day, in an extremely depopulating Oku-Izumo in Shimane, one of the nuke-plant prefectures in Japan. All of nuke power plant regions and nearby have faced the drastic depopulation, the shrinking of job market and the aging society. That was one of the biggest reasons nuke reactors were created in such areas, though after the 2011 Fukushima nuke power plant disaster, all reactors have been suspend for the operation. Yet, the Japanese government and many residents of the nuke power plant belt want to resume. #japan’s_nuclear_power_plant_belt #old_people #oku_izumo #depopulation #aging_society #shimane #japan #rural_area #countryside #handy_capped #iphonephotography #photodocumentaryQ. Sakamaki (@qsakamaki) via Instagram
One of a group of local coal miners searches a field of sunflowers near #Grabovo #ukraine for #mh17 airplane debris and human remains. #україни | Brendan Hoffman / @prime_collective for #gettyimagesnews
One of a group of local coal miners searches a field of sunflowers near #Grabovo #ukraine for #mh17 airplane debris and human remains. #україни | Brendan Hoffman / @prime_collective for #gettyimagesnewsBrendan Hoffman (@hoffmanbrendan) via Instagram
A doctor at work. Ifakara, Tanzania. What I really like the most in this photo is the mother's silent hand in the frame. What will we do without mothers? Photo by Nana Kofi Acquah @africashowboy (Copyright: 2014).
A doctor at work. Ifakara, Tanzania. What I really like the most in this photo is the mother's silent hand in the frame. What will we do without mothers? Photo by Nana Kofi Acquah @africashowboy (Copyright: 2014).Nana Kofi Acquah (@africashowboy) via Instagram
Hundreds of demonstrators gather in DC's #MeridianHillPark aka #MalcolmXpark to honor, and hold a #momentOfSilence for, #MichaelBrown, the unarmed teenager recently killed by police in #Ferguson, MO, and all others affected by #policeBrutality. (photo by @jaheezus aka jahi chikwendiu/The Washington Post) #NMOS14
Hundreds of demonstrators gather in DC's #MeridianHillPark aka #MalcolmXpark to honor, and hold a #momentOfSilence for, #MichaelBrown, the unarmed teenager recently killed by police in #Ferguson, MO, and all others affected by #policeBrutality. (photo by @jaheezus aka jahi chikwendiu/The Washington Post) #NMOS14Jahi Chikwendu (@jaheezus) via Instagram
Feels nice to fly.#hipstamatic #mexicocity
Feels nice to fly.#hipstamatic #mexicocityAdriana Zehbrauskas (@adrianazehbrauskas) via Instagram
"This is the first quiet day for Kiev's residents to come here. So we came to put flowers and pay respect to the people who died." —Olga, 26 years old, from Kiev "Today there is mourning" From my dispatch with viewfinder portraits from Maidan, Kiev on Foreign Policy. http://www.foreignpolicy.com/articles/2014/02/24/today_there_is_mourning_kiev_protester_maidan Images made on an iPhone through my Bronica viewfinder. #kiev #ukraine #filmisnotdead #fujifilm #bronica #6x6 #portrait #photography #photojournalism @viiphoto
"This is the first quiet day for Kiev's residents to come here. So we came to put flowers and pay respect to the people who died." —Olga, 26 years old, from Kiev "Today there is mourning" From my dispatch with viewfinder portraits from Maidan, Kiev on Foreign Policy. http://www.foreignpolicy.com/articles/2014/02/24/today_there_is_mourning_kiev_protester_maidan Images made on an iPhone through my Bronica viewfinder. #kiev #ukraine #filmisnotdead #fujifilm #bronica #6x6 #portrait #photography #photojournalism @viiphotoAnastasia Taylor Lind (@anastasiatl) via Instagram
A platoon of female Shan State soldiers sit on the parade ground during the Golden Jubilee celebrations of the founding of the Shan State. #army #soliders #shanstate #burma #panospictures Patrick Brown, Panos Pictures © 2014
A platoon of female Shan State soldiers sit on the parade ground during the Golden Jubilee celebrations of the founding of the Shan State. #army #soliders #shanstate #burma #panospictures Patrick Brown, Panos Pictures © 2014Patrick Brown (@patrickbrownphoto) via Instagram
Migrant workers develop a pistachio plantation outside of #Alpaugh, #California, #USA on June 16, 2014. With the promise of a hefty return investment groups develop large almond and #pistachio orchards amidst the historic California drought in the arid southern part of Central Valley. To irrigate this farm, a couple of 1000 ft deep wells costing roughly $500,000 each were setup on the land. The demand for new wells in the Valley has never been higher and as drilling companies operate at their maximum capacity the current waiting time takes about 8 months. #water #watercrisis #complexemergency #drought #centralvalley #environment #agriculture @azdarya #everydayUSA
Migrant workers develop a pistachio plantation outside of #Alpaugh, #California, #USA on June 16, 2014. With the promise of a hefty return investment groups develop large almond and #pistachio orchards amidst the historic California drought in the arid southern part of Central Valley. To irrigate this farm, a couple of 1000 ft deep wells costing roughly $500,000 each were setup on the land. The demand for new wells in the Valley has never been higher and as drilling companies operate at their maximum capacity the current waiting time takes about 8 months. #water #watercrisis #complexemergency #drought #centralvalley #environment #agriculture @azdarya#everydayUSABalazs Gardi (@balazsgardi) via Instagram
Home of the tent! Nomadic bride and groom at north-east of #iranFollowing
Home of the tent! Nomadic bride and groom at north-east of #iranFollowing Ako Salemi (@f64s125) via Instagram
The delivery of aid to the survivors of last Friday's landslide disaster in Badakhshan Province caused clashes between villagers and police who fired warning shots to disperse the crowd yesterday. The mood is somewhat less tense today but distribution is still chaotic at best. Andrew Quilty / Oculi. 7.5.2014 #afghanistan #badakhshan #landslide #aid #emergency
The delivery of aid to the survivors of last Friday's landslide disaster in Badakhshan Province caused clashes between villagers and police who fired warning shots to disperse the crowd yesterday. The mood is somewhat less tense today but distribution is still chaotic at best. Andrew Quilty / Oculi. 7.5.2014 #afghanistan #badakhshan #landslide #aid #emergencyAndrew Quilty (@andrewquilty) via Instagram
The Pasture of The Fourth Horseman There is a slight, upward grade from the escape hatch of the Titan I nuclear missile base. Each of the 18 sites scattered throughout the interior of the U.S. are, essentially, perfect copies of one another. There are academic differences —the location of the septic ponds or how the concrete domes were formed —but a single, common schematic laid over the deceptively innocuous landmarks on the surface will decode the mystery of what lies underneath. More than a quarter mile of tunnels like this connect the silos to their various support structures like the deep tunnels of an apocalyptic ant pile. At the end of this tunnel, there is an enormous fuel terminal that serviced the sixteen story nuclear missile held in a deep silo just next to it. Each missile site contained three ICBMs that could be fired in sequences separated by about fifteen minutes. It took 47 seconds to open the silo lid and roughly two minutes to raise the missile sixteen stories to the surface. Before the site was salvaged, the walkway would have been covered with steel and the racks on either side would have linked the launch control room to the missile itself with hundreds of miles of cables. Perhaps it goes without saying, but its recitation somehow underscores the purpose of these facilities: there was no protocol for reloading a launched missile silo. These items were one-time-use-only.
The Pasture of The Fourth Horseman There is a slight, upward grade from the escape hatch of the Titan I nuclear missile base. Each of the 18 sites scattered throughout the interior of the U.S. are, essentially, perfect copies of one another. There are academic differences —the location of the septic ponds or how the concrete domes were formed —but a single, common schematic laid over the deceptively innocuous landmarks on the surface will decode the mystery of what lies underneath. More than a quarter mile of tunnels like this connect the silos to their various support structures like the deep tunnels of an apocalyptic ant pile. At the end of this tunnel, there is an enormous fuel terminal that serviced the sixteen story nuclear missile held in a deep silo just next to it. Each missile site contained three ICBMs that could be fired in sequences separated by about fifteen minutes. It took 47 seconds to open the silo lid and roughly two minutes to raise the missile sixteen stories to the surface. Before the site was salvaged, the walkway would have been covered with steel and the racks on either side would have linked the launch control room to the missile itself with hundreds of miles of cables. Perhaps it goes without saying, but its recitation somehow underscores the purpose of these facilities: there was no protocol for reloading a launched missile silo. These items were one-time-use-only.Matt Slaby (@mattslaby) via Instagram
At King Tom Cemetery in Freetown, Sierra Leone, most of the graves are freshly dug and unmarked. Esther George, a health worker who died of Ebola, had the only permanent nameplate in the whole area. Yesterday the crowded ebola section received 25 bodies. #onassignment for @wsjphotos in #Freetown #sierraleone covering #ebola
At King Tom Cemetery in Freetown, Sierra Leone, most of the graves are freshly dug and unmarked. Esther George, a health worker who died of Ebola, had the only permanent nameplate in the whole area. Yesterday the crowded ebola section received 25 bodies. #onassignment for @wsjphotos in #Freetown #sierraleone covering #ebolaGlenna Gordon (@glennagordon) via Instagram
A #Palestinian #girl stands during a #rain storm while #walking through a neighbourhood #destroyed during the 50 day conflict between #Israel and #Hamas, in the Shejaiya neighbourhood of #Gaza #City on October 20, 2014. By Wissam Nassar @wissamgaza #wissamgaza #war #NYT
A #Palestinian #girl stands during a #rain storm while #walking through a neighbourhood #destroyed during the 50 day conflict between #Israel and #Hamas, in the Shejaiya neighbourhood of #Gaza #City on October 20, 2014. By Wissam Nassar @wissamgaza #wissamgaza #war #NYTWilliam Nassar (@wissamgaza) via Instagram
The dots and numbers painted on Kim Il Sung Square, and the street running through it, make up a complex guide grid used to orchestrate the mass gatherings and parades held here. I know ice photographed this same thing many times but I think it's interesting and revealing.
The dots and numbers painted on Kim Il Sung Square, and the street running through it, make up a complex guide grid used to orchestrate the mass gatherings and parades held here. I know ice photographed this same thing many times but I think it's interesting and revealing.David Guttenfelder (@dguttenfelder) via Instagram
Ukraine & Belarus together! #ukraine #belarus #flag #flags #fire #onfire #барикади #barricades #грушевського #revolution #революція #євромайдан #euromaidan #kyiv #kiev #ukraine #night #kievblog #kiev_foto #kiev_ig #kiev_am #insta_kiev #insta_kyiv #insta_ukraine #kyivgram #kyivtype #kyiv_sky #kyiv_talk #kiev_foto #igerskiev #igukraine
Ukraine & Belarus together! #ukraine #belarus #flag #flags #fire #onfire #барикади #barricades #грушевського #revolution #революція #євромайдан #euromaidan #kyiv #kiev #ukraine #night #kievblog #kiev_foto #kiev_ig #kiev_am #insta_kiev #insta_kyiv #insta_ukraine #kyivgram #kyivtype #kyiv_sky #kyiv_talk #kiev_foto #igerskiev #igukraineAlexey Beloschuk (@beloschuk) via Instagram
mage from my series Politics in Black and White which is included in The Space Between curated by Henry Jacobson opening today at Center for Photography at Woodstock. Other artist include @postcardshome @echosight @tiny_collective @dannyghitis #hillary #clinton #2016 #politics #woodstock @cpwwpc #jonimitchell @markpetersonpixs
Image from my series Politics in Black and White which is included in The Space Between curated by Henry Jacobson opening today at Center for Photography at Woodstock. Other artist include @postcardshome @echosight @tiny_collective @dannyghitis #hillary #clinton #2016 #politics #woodstock @cpwwpc #jonimitchell @markpetersonpixsMark Peterson (@markpetersonpixs) via Instagram
A homemade personal protection suit. This man brought his sick mother to the #Ebola clinic in #monrovia #liberia.
A homemade personal protection suit. This man brought his sick mother to the #Ebola clinic in #monrovia #liberia.Ben Solomon (@bcsolomon) via Instagram
World Cup fever: a boy plays football at home in his small apartment, with Argentina's flag behind hanging from the balcony. Lots of flags were hung in houses and apartments in Buenos Aires. #fans #argentina #vamosargentina #brasil #brazil #worldcup #copadumundo #mundial #flag #kids #child #brasil2014 #brazil2014 #boy #futbol #futebol #football #soccer #phmuseum #buenosaires #passion #pasion #love #messi #torcida #hinchada #hinchas This photo is part of the #teamphotogs project, from @time and @phmuseum
Alejandro Kirchuk via Instagram
Siti and her son Yong visits the grave of her first child, Haikal, who passed away due to a sudden illness. Siti was not aware that she was HIV positive and didn't take precaution to prevent passing on the virus to her baby. Siti has been undergoing Antiretroviral Therapy since then. As a result, Siti is healthy and although she is HIV positive, Yong is negative. At his last checkup Yong weighs 10.5kg and he will be celebrating his 1st birthday this month. I am continuing the 2nd chapter of my project documenting the HIV/AIDS epidemic in Tanah Papua, collaborating with the Clinton Foundation on a campaign to lower stigma and discrimination against people living with HIV/AIDS in the provinces.#againstallodds #papua #indonesia #HIV #AIDS #epidemic http://instagram.com/p/t3AO_FRw4A/
Siti and her son Yong visits the grave of her first child, Haikal, who passed away due to a sudden illness. Siti was not aware that she was HIV positive and didn't take precaution to prevent passing on the virus to her baby. Siti has been undergoing Antiretroviral Therapy since then. As a result, Siti is healthy and although she is HIV positive, Yong is negative. At his last checkup Yong weighs 10.5kg and he will be celebrating his 1st birthday this month. I am continuing the 2nd chapter of my project documenting the HIV/AIDS epidemic in Tanah Papua, collaborating with the Clinton Foundation on a campaign to lower stigma and discrimination against people living with HIV/AIDS in the provinces. #againstallodds #papua #indonesia #HIV #AIDS #epidemic Andri Tambunan (@andritambunan) via Instagram
Goodbye Thingyan, catch ya next year! #myanmar #thingyan2014 #thingyan #asia #newyearhttp://instagram.com/p/m2f_B-w0bP/?modal=true
Goodbye Thingyan, catch ya next year! #myanmar #thingyan2014 #thingyan #asia #newyearLauren DeCicca (@deciccaphoto) via Instagram
Project Mi Barrio Ð Nahuelito y su Abuelito. #Rumihuaico, #Ecuador, #projectmibarrio, #photojournalism, @runa_photos, @panospictures, @natgeo, @thephotosocietyhttp://instagram.com/p/vlcdGqrw44/?modal=true
Project Mi Barrio Ð Nahuelito y su Abuelito. #Rumihuaico, #Ecuador, #projectmibarrio, #photojournalism, @runa_photos, @panospictures, @natgeo, @thephotosocietyIvan Kashinsky (@ivankphoto) via Instagram
Children play on "jackstones" or concrete structures made by foreign NGOs to serve as breakwater for storm surges in Hernani Eastern Samar. #Haiyan #Yolanda #OneYearAfterhttp://instagram.com/p/vIjQdNFrZs
Children play on "jackstones" or concrete structures made by foreign NGOs to serve as breakwater for storm surges in Hernani Eastern Samar. #Haiyan #Yolanda #OneYearAfterJohn Javellana (@javellanajohn) via Instagram
Eritrean wedding in Haifa today. #israel #wedding #lovemypeople #haifa #bahaigarden #view #eritrea #stairshttp://instagram.com/p/ms35gPgjBI/?modal=true
Eritrean wedding in Haifa today. #israel #wedding #lovemypeople #haifa #bahaigarden #view #eritrea #stairsMalin Fezehai (@malinfezehai) via Instagram
Life moves on in Tacloban port, 6 months after #haiyan # Philipinnes @plansverigehttp://instagram.com/p/nhQKk9OXpD/?modal=true
Life moves on in Tacloban port, 6 months after #haiyan # Philipinnes @plansverigePieter Ten Hoopen (@pietertenhoopen) via Instagram

The sky-high valuation makes Facebook’s 2012 acquisition of Instagram look like a slam-dunk. The social-media giant only paid $1 billion for Instagram in a cash-and-stock deal.

And Facebook’s move to make money off Instagram is just getting started. Instagram began to roll out ads in its photo stream in late 2013, with video ads debuting on the platform roughly a year later. Citi’s May expects that 2015 will be the first year that Facebook begins to develop “more meaningful off-Facebook revenue streams,” and that includes efforts to make more money off Instagram.

Even with Instagram’s likely higher valuation, it is still a relatively small piece of Facebook, which is overall worth more than $220 billion. But the photo-sharing service’s new valuation estimate by Citi would suggest it is worth more than Twitter, which has fewer monthly active users and a market capitalization of almost $24 billion.

That valuation gap could potentially widen. May said that he expects Instagram could continue to rapidly add users and expects the gap in total viewers between Instagram and Twitter will continue to widen. By the end of 2015, May forecasted that Instagram could have 420 million users verses Twitter’s 319 million.

This article originally appeared on Fortune.com

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