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Shares in Facebook (FB) Jump on News of Instagram Ads

By  +Follow October 4, 2013 5:31AM
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Shares in social media giant Facebook (FB) spiked Friday on news that it would start selling ads on the photo-sharing service Instagram. News that Facebook would begin monetizing their $1 billion acquisition from last year pushed shares up almost 3.5 percent.

Instagram to Ease Users In

Instagram assured users in a blog posting that it would make efforts to prevent the new ads from interrupting their users’ current experience.

“Our aim is to make any advertisements you see feel as natural to Instagram as the photos and videos many of you already enjoy from your favorite brands,” Instagram said on the blog. “After all, our team doesn’t just build Instagram, we use it each and every day. We want these ads to be enjoyable and creative in much the same way you see engaging, high-quality ads when you flip through your favorite magazine.”

”Seeing photos and videos from brands you don’t follow will be new, so we’ll start slow. We’ll focus on delivering a small number of beautiful, high-quality photos and videos from a handful of brands that are already great members of the Instagram community,” the blog post continued.

The $1 billion deal to purchase Instagram in April of last year appeared peculiar to many at the time, coming as Facebook was ramping up for its IPO and appearing to buy a steep premium on the small company’s value. However, the long-term strategy may appear clearer after today’s announcement.

Mobile Presence a Focus With Pending Twitter (TWTR) IPO

Many analysts believe the push to increase ad revenues through Instagram is a positive move for Facebook.

“There just continues to be momentum, continues to be good news,” said Benjamin Schachter, an analyst at Macquarie Securities USA Inc. “Even though the Instagram news was somewhat expected over time -- we’ve been waiting for the announcement this year, and yeah, it’s going to be a positive.”

The move comes one day after Twitter ($TWTR) opened its confidential IPO. News outlets have compared the two companies, with a particular focus on mobile ad revenues, noting that 65 percent of Twitter’s ad revenue was coming from mobile as compared to just 41 percent of Facebook’s. As more and more users shift to mobile, Facebook’s ability to monetize ads in that area is believed to be crucial, and Instagram could ultimately prove to be an essential piece of that puzzle.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions.


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Results for FB
Joel
5 Mar 15 18:11:23
RT @Benzinga: Tomorrow you can #AskGeneMunster your questions on $AAPL $TWTR $FB $GOOG live @ 8:35 am ET http://t.co/V2lDWGLEXg http://t.co…
TweakTown
5 Mar 15 18:11:14
.@AMD to unveil its next-gen #Radeon R9 #390X at Computex in June $AMD, $FB, $NVDA http://t.co/xzvEFHtCnF http://t.co/4IFuJFiGt5
Cameron Wilmot
5 Mar 15 18:11:07
.@AMD to unveil its next-gen #Radeon R9 #390X at Computex in June $AMD, $FB, $NVDA http://t.co/O1nzaZN2iV http://t.co/ZL5GB4sD0N
Gambler
5 Mar 15 18:07:19
Today's active CASINOs $AAPL $LL $CME $FB ~~~~~~~~ Big gamblers have entered this CASINO pay attention $ANTM
Dave Voino
5 Mar 15 18:04:43
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Scott Bauman
5 Mar 15 18:03:43
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Bradley
5 Mar 15 18:01:05
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Market Parse
5 Mar 15 18:00:42
@Kokabella $FB Your tweet has been featured on Market Parse, for iPhone. http://t.co/YHInvBkJcO
msputoptions
5 Mar 15 18:00:07
$SWHC chart only seen on my $FB account http://t.co/DAFT7AsySS
eJay
5 Mar 15 17:59:38
Trade-Ideas: Exact EXAS Is Today's Post-Market Leader Stock $FB http://t.co/YuDxCdm0ve
Cards
5 Mar 15 17:58:56
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Capital Market Labs
5 Mar 15 17:57:57
$FB R&D and Operating Margin Trends #CML http://t.co/iGkxJOCIVl
Breaking News Now
5 Mar 15 17:57:02
$AAPL $FB: Apple's Secret Lab Lets Facebook Fine-Tune Apps Before the ...: http://t.co/BKMjqkuEXB
Girl Maverick Trader
5 Mar 15 17:56:18
I stalked CSL @ $64 and was too 🐔.shit to take the trade. This, is now the price...of opportunity cost. #stocks $FB http://t.co/unoHkndtZO
alex campbello
5 Mar 15 17:55:53
$FB http://t.co/mCotuHamWN
alex campbello
5 Mar 15 17:55:37
$FB Bloomberg adds Facebook could unveil the offering at its annual f8 developer's conference (March 25-26)
alex campbello
5 Mar 15 17:55:25
$FB reportedly working on new mobile ad platform
Seeking Alpha Alerts
5 Mar 15 17:55:11
@AstroMike7 $FB Why We Changed Facebook's Price Target To $88 http://t.co/7iCjvIVq1J
Seeking Alpha Alerts
5 Mar 15 17:55:11
@nybigtymer $FB Why We Changed Facebook's Price Target To $88 http://t.co/7iCjvIVq1J
Stock Market Basics
5 Mar 15 17:54:05
RT @10Xtrading: Daily Stock Market Review Video using Technical Analysis http://t.co/LuajjxXlRn $AAPL $AMZN $BABA $BAC $FB $GOOGL $JNJ $TWTR
ProVesting
5 Mar 15 17:47:01
$TWTR $FB: Is Mark Cuban Right About 2015's Tech Bubble? Analysts Weigh In: http://t.co/9v2lF99Tx6
Michael Kim
5 Mar 15 17:43:47
Kudos @profgalloway! Never agreed so much with any analysis. See ASAP: "Who Wins, Who Loses: $AMZN $APPL $FB $GOOG " http://t.co/DQaMHNmpA0
alex campbello
5 Mar 15 17:41:45
$FB Why We Changed Facebook's Price Target To $88 http://t.co/su81zshCFN
scott carafello
5 Mar 15 17:33:39
RT @RiskReversal: Tech Porn with @profgalloway---> Why Amazon and Google are Losing the War by @ReformedBroker http://t.co/XrAsaCcFRB $AAPL…
Skevaboy
5 Mar 15 17:33:23
$AAPL $FB Facebook going to be on Apple Watch , that's big news !! http://t.co/Ci3B0e4DbB @JONFROTT"
Rob Garrison
5 Mar 15 17:24:49
RT @Benzinga: Tomorrow you can #AskGeneMunster your questions on $AAPL $TWTR $FB $GOOG live @ 8:35 am ET http://t.co/V2lDWGLEXg http://t.co…
Breaking News
5 Mar 15 17:21:04
$FB: Facebook CTO Michael Todd Schroepfer Sells 25000 Shares (FB): http://t.co/b4sLvqqNH1
Clayton R.
5 Mar 15 17:19:09
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James DiPlata
5 Mar 15 17:16:54
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LikeFolio Loves
5 Mar 15 17:16:32
RT @RiskReversal: Tech Porn with @profgalloway---> Why Amazon and Google are Losing the War by @ReformedBroker http://t.co/XrAsaCcFRB $AAPL…
Breaking News
5 Mar 15 17:16:02
$FB: Insider Selling: Facebook CTO Sells 25000 Shares of Stock (FB): http://t.co/ubLCWFXsuP
Skevaboy
5 Mar 15 17:15:32
$AAPL $FB Apple giving Facebook and others early access to Apple Watch http://t.co/eFt0jzTufq @JONFROTT
PTSD_Trader
5 Mar 15 17:14:33
$FB $TWTR for those who didn't read the article.... <sigh> http://t.co/hKNrAQRf4o
Leilani Pips™
5 Mar 15 17:13:56
RT @RiskReversal: Tech Porn with @profgalloway---> Why Amazon and Google are Losing the War by @ReformedBroker http://t.co/XrAsaCcFRB $AAPL…
HedgeMind
5 Mar 15 17:13:45
Patrick Mccormack, has been holding $FB since 2013 from ~$55., made money, but $KORS since 2013 too, lost money. http://t.co/20na0kKR7W
Dan Nathan
5 Mar 15 17:12:44
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Ambiguous
5 Mar 15 17:09:01
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ProVesting
5 Mar 15 17:07:03
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fabio bustamante
5 Mar 15 17:01:30
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Timothy Sykes
5 Mar 15 17:00:44
My new life's mission http://t.co/WKSYHOB0Fx take it seriously $TWTR $FB
Adam Zientarski
5 Mar 15 17:00:24
RT @Benzinga: Tomorrow you can #AskGeneMunster your questions on $AAPL $TWTR $FB $GOOG live @ 8:35 am ET http://t.co/V2lDWGLEXg http://t.co…
msputoptions
5 Mar 15 17:00:08
$TSL retracement noted for possible upward gap closure posted earlier on my $FB acct http://t.co/QcwJd0vQ01
Jason Shubnell
5 Mar 15 16:55:52
RT @Benzinga: Tomorrow you can #AskGeneMunster your questions on $AAPL $TWTR $FB $GOOG live @ 8:35 am ET http://t.co/V2lDWGLEXg http://t.co…
Capital Market Labs
5 Mar 15 16:51:11
RT @OphirGottlieb: Fastest Growing MEGA Caps - 1 $GILD 2 $FB 3 $BABA 4 $AMZN 5 $GOOGL 6 $AAPL <--- Whoa - Chart --> http://t.co/CAJvvuhfIu
Grynn
5 Mar 15 16:48:08
Facebook = (low-cost) access for everyone, no privacy. $AAPL = privacy, at a cost. Does the $FB model imply low-quality? Both views valid?
Joe Young
5 Mar 15 16:47:14
RT @Benzinga: Tomorrow you can #AskGeneMunster your questions on $AAPL $TWTR $FB $GOOG live @ 8:35 am ET http://t.co/V2lDWGLEXg http://t.co…
Jake Mann
5 Mar 15 16:45:44
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Stock Hobbit
5 Mar 15 16:45:09
Logging in now to live stock chat http://t.co/ndv5bWOOj4 $GOOG $AAPL $FB $EBAY #options #stocks #daytrading http://t.co/TPVuAThS1z
Dan
5 Mar 15 16:45:04
$FB high open interest range is 77.50 to 80.00 for option expiration 03/06/2015. http://t.co/FgXoDpndiR
Carolyn B Miciano
5 Mar 15 16:44:29
Free course on portfolio hedging http://t.co/OroJJ5pvNb $AMZN $FB $TWTR
				
				
By  +Follow October 4, 2013 5:31AM
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