The photo-sharing app Facebook Inc. acquired for $715 million in 2012 Instagram generated more than a quarter of the tech giant company’s revenue last year.
Instagram brought in about $20 billion in advertising revenue in 2019, hammering Google’s video app YouTube, which recorded $15.1 billion in ad sales — a number parent company Alphabet Inc. revealed Monday for the first time. Unlike YouTube, Instagram doesn’t share its ad sales with users who post content on its app.
The site might be more profitable, too. YouTube shares most of its ad revenue with creators, and its video-only focus could mean steeper costs for streaming clips. Facebook has declined to comment on the data.
Even though Instagram had no model for bringing in revenue when it was acquired by Facebook the app has become increasingly central to Facebook’s future, with users and advertisers flocking to the app even as sales growth slows at the main social network. The company hasn’t broken out Instagram’s revenue so far, and at last check hasn’t updated Instagram’s user count beyond the 1 billion reported in 2018.
It’s not entirely shocking that Instagram would pull in that kind of money. Advertising is everywhere in the app these days, including posts in the regular feed and Stories. Methinks these revelations will make Instagram fuel calls to break up Facebook and reduce its clout.
The Democratic candidate for US Presidency Senator Elizabeth Warren had called for the split of the tech giant calls that Chief Executive Officer Mark Zuckerberg has objected.
Facebook co-founder Chris Hughes said Zuckerberg’s plan to more closely unite the company’s different apps, which also include WhatsApp and Messenger, could make it harder to break up from a technical standpoint.