Would Instagram Be The Money Spinner For Facebook Inc. (NASDAQ:FB)
Facebook Inc (NASDAQ:FB) has grown from one strength to the next over the past one year. It is making a success of its foray onto mobile platforms and is monetizing its user-base. Very recently, the company acquired Instagram in a deal worth $1B. But Facebook Inc (NASDAQ:FB) cannot afford any delay in establishing Instagram as a money-making proposition and it seems like the company is heading in this direction as early as the Q4. Analysts are of the opinion that not too much revenue will come in right away but that there will be better results in 2014.
User reaction important
The one probable hurdle with adding an advertising user-base to Instagram is the reactions from users. The Instagram investment will be able to pay for itself only if Facebook Inc (NASDAQ:FB) puts ads on it. However, the fact also is that the company cannot risk any protests from users and this puts the company in a catch22 situation.
It has launched ads successfully on its social networking platform but has faced issues from users who feel that that they do not want unnecessary and irrelevant ads clogging their profiles. The company’s success in advertising will lie in it being able to maintain equilibrium between having just the right number of right ads that will not be too intrusive or obstructive to the main content.
Friday’s trading session
In Friday’s trading, Facebook Inc (NASDAQ:FB) rose by 3.78%. The shares opened at a price of $49.77, climbed to an intraday high of $51.16 and dipped to a close of $51.04. Approximately 74.45 million shares were traded on Friday while an average volume of 377.94 million shares were traded over a 30 day period. The 52-week low of Facebook Inc (NASDAQ:FB) shares is $18.80 and its 52-week high is $51.60. The company has a market capitalization of $124.30 billion.