Instagram Expected To Boost Facebook's Quarterly Earnings Report

When Facebook releases its quarterly earnings report Wednesday afternoon, most analysts expect the social media behemoth to reveal revenue at about 43 percent annually. It is, after all, the biggest social network in the world, with more than 2 billion monthly active users. However, Facebook also owns Instagram and analysts think the popular photo-based app will make up a decent chunk of Facebook’s revenue, according to Bloomberg.

Facebook originally acquired Instagram in 2012, about two years after the app launched. Mark Zuckerberg’s company spent about $1 billion on it, according to the New York Times. A Wells Fargo analyst quoted in Bloomberg’s report estimated that, by 2020, Instagram could contribute $20 billion to the company’s overall revenue, which would be a significant return on investment for Facebook.

Instagram has experienced great success in recent years, particularly with younger users who might feel that Facebook is the app for their parents now. A recent report indicated that people are spending almost as much time looking at Instagram every day as Facebook. It would be bad news for Facebook to lose ground to another app, but all the ad revenue generated by people scrolling through both feeds goes into the same pot at the end of the day.

To put Instagram’s success into perspective, about twice as many people use the app’s Stories feature every day as the entirety of Snapchat, Instagram’s closest competitor. The user-created Stories disappear after 24 hours and were originally a staple of Snapchat before Instagram cribbed the feature and made it significantly more popular.

Last month, Instagram even introduced the IGTV feature for longer form videos. The new feature is something of a YouTube competitor.

Facebook will, in all likelihood, report record highs in revenue and user count in its earnings report, according to Bloomberg. Zacks Investment Reseach provided a consensus estimate for earnings and revenues which were "$1.75 and $13.43 billion, respectively, representing an increase of 44.1% and 32.6% from the year-ago period."

All of that financial positivity comes despite a cavalcade of negative press towards Facebook throughout 2018. Since March, Facebook has dealt with the Cambridge Analytica data harvesting scandal and further questions about the company giving user data to dozens of hardware companies.

Earlier this month, Facebook had to issue an apology for lax moderation towards hateful, far-right pages with lots of users.