April 21, 2012
Last week after acquiring Instagram, Mark Zuckerberg is eying to make money from its mobile subscribers. This is something which is bound to happen to save Facebook from growing competition in internet space, especially over mobile.
Donâ€™t forget that Instagram, with its growing subscriber base was itself a threat for Facebookâ€™s market dominance. That is Instagramâ€™s application was on its way to become the easy medium to take and share photos, especially in mobile technology. Moreover Google is giving tough competition in the social web space by launching its Google Plus. Also Google in news for launching the worldâ€™s first Glass Computing â€œGoogle Glassâ€ which would mean instant clicking, tagging and sharing of photos without even using finger. Keeping precisely its eye on recent development in the internet space, Zuckerberg grab the opportunity to control future cash-cow mobile photo sharing by buying the company itself.
As of now, Facebook makes on money from its mobile subscribers and it is also expected that once the Facebook IPO hits the market, its valuation may fall from its initial value for a short period, thatâ€™s when the Instagram will come into the picture to rescue its new owner. That is it will become the new source of revenue for the Facebook. Instagram provides a direct avenue for targeting mobile ecosystem.
Expected revenue contribution by Instagram. Click here to download the excel sheet of our calculations.