Instagram revenue to get 170% boost as Facebook expands ads

The revenue Facebook Inc. FB, -0.86% derives from its photo-sharing app Instagram is expected to nearly triple from 2015 to 2016 as Facebook boosts monetization on the platform, according to estimates from Bank of America Merrill Lynch.

“We think Instagram has material ad potential with the revenue ramp at Facebook’s management’s discretion, which gives us more confidence in estimates over the next two years,” said analyst Justin Post.
 The brokerage anticipates 2016 Instagram revenues of $300 million, compared with estimates of $110 million in 2015. Earlier this week, Facebook expanded its ads API [application programming interface] to its key digital marketing partners, including Salesforce CRM, -0.03% as it begins to roll out Instagram ads more broadly.

 Shares of Facebook are down about 2% since the company’s quarterly earnings report on July 29, versus a 1% decline for the broader S&P 500.

source:Market watch

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