It appears that Instagram generated more than a quarter of Facebook’s total revenue last year, according to sources.
The photo-sharing social media giant was acquired by Facebook in 2012 for $715 million. Last year, Instagram generated around $20 billion, though the sources for that information remained anonymous because the figures weren’t yet public.
The stats would beat Google-owned YouTube, which drew in $15.1 billion in ad sales, according to parent company Alphabet. Per their recent ad sales report, numbers have been disappointing for Alphabet, as analysts had expected more returns from customers who watch videos online.
Sales growth is slowing on the main Facebook app, and Instagram has become increasingly important to the growth of the social media behemoth as users continue to flock to the platform. The company doesn’t disclose separate revenue rates for its properties – instead, it highlights their integration as a “family of apps.”
Critics, including original Facebook Founder Chris Hughes, have said Facebook’s acquisitions of various other social media-type entities like WhatsApp and Messenger could pose the risk of eventually breaking up the company from a technological standpoint.
When Instagram was initially acquired by Facebook, it had no direct way of earning revenue. Today, it earns advertising revenue just as Facebook does. To help increase Instagram’s sales, Facebook has ramped up the number of ads on the platform in the last few years, particularly as Facebook’s own feeds have become more populated with marketing posts.
Instagram’s direct messaging team now reports directly to Facebook’s team, and the company is changing Instagram’s brand to “Instagram from Facebook.”
Facebook is currently under investigation by the U.S. Department of Justice related to antitrust issues. Calls to break up the social media conglomerate, including by Democratic presidential candidate Elizabeth Warren, have been met with resistance by CEO Mark Zuckerberg.
Recently released costs and expenses from Facebook increased about 51 percent in 2019, which mostly consisted of new marketing and sales spending.
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