We already knew that Instagram is a giant app that accounts for a significant portion of Meta’s overall business.
But now we know how big it really is, thanks to a new court filing: In 2021, the photo and video app generated $32.4 billion in ad revenue, or 27% of Meta’s overall revenue.
More context: Instagram made more money selling ads that year than Google’s YouTube, which generated $28.8 billion in ad revenue. (Analysts at MoffettNathanson estimate YouTube’s overall revenue for that year at $35.4 billion, after factoring in money generated from its music and TV subscription services. )
And remember that unlike YouTube, which gives up 55% of every ad dollar generated to content owners who upload videos to the site, Instagram (and most other social apps) spends much, much less. It still expects most users to provide it with photos and videos for free.
Instagram’s revenue figures come from a filing Meta filed this week, seeking to get a judge to dismiss a federal antitrust suit.
We do not know if this legal maneuver will succeed. But the documents do a great job of showing how quickly Instagram grew under Meta’s ownership. Recall that Meta – then Facebook – paid $1 billion for Instagram in 2012, when it was a no-revenue photo-sharing startup with a handful of employees. It is now led by Adam Mosseri, former Facebook product manager.
From the filing: “Instagram generated advertising revenue of $11.3 billion in 2018, $17.9 billion in 2019, $22 billion in 2020, $32.4 billion in 2021 and $16.5 billion dollars in the first half of 2022. » Zoom!
One more thing: Last month we noted that analysts now suggest YouTube could be worth $400 billion. These new numbers suggest that Instagram could very well be worth something similar.
A crude way to do this would be to assume that Instagram’s growth spurt has continued and that it now accounts for almost a third of Meta’s overall revenue. If we apply this ratio to the company’s current market capitalization of $1.34 trillion, that brings us to $440 billion. It might be worth thinking about it the next time you post a photo.
businessinsider
