More than a quarter of Facebook’s revenue last year came from Instagram, the photo-sharing app Facebook bought for $715 million in 2012.
Instagram brought about $20 billion in advertising revenue in 2019, sources said on condition of anonymity, as the numbers are not public. This exceeds the revenue of the YouTube service, which earned $15.1 billion in advertising sales – these data were first released yesterday by Alphabet Inc., the parent company. Facebook declined to comment on the news.
Instagram is a key asset for the future of Facebook. Facebook has long seen Instagram as a side project, but the service has grown faster than expected. Even the recent scandals with Facebook bypassed Instagram, although it seems that few people have illusions that the policy regarding personal data between the two services varies. Nevertheless, users (and followed by advertisers) continue to switch to a photo service for exchanging personal messages and photos, while Facebook itself has a tendency to reduce the growth of advertising revenue.
Facebook has increased the frequency of posting ads on Instagram
Facebook does not disclose Instagram revenue separately in the reports, instead preferring to highlight the service in the “application family” category. Zuckerberg is now more involved in the work of his daughter company – for example, the team responsible for personal messages on Instagram now reports to the Facebook Messenger team, and the Instagram brand is changed to “Instagram from Facebook.” In 2018, the number of Instagram users reached 1 billion.
Instagram did not have a business model when the company was acquired by Facebook. Now the application makes money in the same way as Facebook: selling ads that look like regular messages in the main stream of the application and in the story. Over the past couple of years, Facebook has increased the frequency of posting ads on Instagram to help increase the company’s sales, while the Facebook news feed is becoming more saturated with marketing posts.
Instagram’s significant contribution to the company’s overall sales explains why CEO Mark Zuckerberg is actively opposed to the Facebook split calls voiced by U.S. Senator Elizabeth Warren, a Democratic presidential candidate.
A transcript of the audio recording of the two-hour Q & A session of the Facebook head and company employees was previously released. According to the document, Zuckerberg believes that the company will have to sue Elizabeth Warren if she wins the US presidential election in 2020 and sets a course for ending the monopoly position of Internet companies.
Elizabeth Warren proposed introducing the concept of “public platform” in antitrust law
Elizabeth Warren proposed introducing the concept of “public platform” in antitrust law. These will include companies with annual revenues of more than $ 25 billion, offering trading platforms, exchanges or platforms for communication between participants for general use on the Internet – thus, Amazon, Facebook, and Google will fall under the definition. Technological mergers that the senator considers anticompetitive must be discouraged. The politician claims that these mergers and acquisitions have damaged competition.
If such a law is passed, then, for example, the Amazon Basics brand will have to be separated from the Amazon Marketplace, and the Google ad network from the search engine. In addition, Warren proposes to abolish many interfering mergers of technology companies, including the acquisition of WhatsApp and Instagram by Facebook, Waze, Nest and DoubleClick by Google, and Whole Foods and Zappos by Amazon. Elizabeth Warren believes that such reforms will not affect the Internet globally: small businesses will have a chance to compete with Google, Facebook or Amazon, which will also provide services to users.