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NEW YORK, Dec. 19 (UPI) -- The photo-sharing app Instagram, acquired by Facebook two years ago for $1 billion, is now worth $35 billion, a Citigroup analyst said Friday. Mark May said he increased his valuation from $19 billion based on Instagram's announcement last week that it has hit the 300 million user mark.
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"While Instagram is still early in monetizing its audience and data assets, and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized," May said.
The report compared Instagram to Twitter, which is now a public company with a valuation of $23.5 billion.
"Not only is Instagram's audience now larger than Twitter, but its users are 1.8 times more engaged, and user growth has been greater," the report said.
May predicted Instagram will have 420 million users by next May.
Even the $35 billion valuation for Instagram leaves it as a fraction of Facebook, which went public in 2012, shortly after it acquired Instagram. Facebook has a market capitalization of $220 billion.
