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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
PolgarStocks
20 Dec 14 15:36:21
$FB News Updated Saturday, December 20, 2014 6:07:25 PM $BTU $BTU $XRT $XLI http://t.co/MGGaZvL4S2
Russell Barbour
20 Dec 14 15:32:02
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FinSentS NASDAQ
20 Dec 14 15:28:03
$FB:US Will Gains In Mobile Ad Rivalry With Google Push Facebook Higher? #FACEBOOK INC http://t.co/q8ngayU8Cw #NASDAQ
Bidness Etc
20 Dec 14 15:27:00
#Facebook is partnering with HLN to create a TV series http://t.co/ttVYaU5psT $FB $TWX http://t.co/mRWKdmrITp
PennyStock Zone
20 Dec 14 15:23:58
http://t.co/1lIQ2HI6Ev <-- This Millionaire Creates Millionaire Traders free informational video $FB $CAMT $HURC $LIVE $FCEL
traderstewie
20 Dec 14 15:23:35
@bvrm1975 @SunriseTrader $FB is the ultimate 3 steps forward, 2 steps back kinda of mover. Breakouts fail a few days later, then pops later
Matt
20 Dec 14 15:22:53
$WDC $JPM $C $TWTR $FB $F $GM http://t.co/1wKm56iAcj
kenr0966
20 Dec 14 15:18:29
RT @traderstewie: $FB : posted chart friday. Already broke out but thinking this has higher to go(probably higher than stated target) http:…
Sunrise Trader
20 Dec 14 15:06:36
RT @traderstewie: $FB : posted chart friday. Already broke out but thinking this has higher to go(probably higher than stated target) http:…
CashRocket
20 Dec 14 15:00:09
@traderstewie sorry forgot chart $FB http://t.co/Y1nOywY7B5
シ Jimmy Cox
20 Dec 14 14:56:39
RT @BrandonRCard: $FB over $TWTR @petenajarian @ReformedBroker. $FB is slowly stealing video views from YouTube. Even with IG monetized $30…
traderstewie
20 Dec 14 14:55:43
$FB : posted chart friday. Already broke out but thinking this has higher to go(probably higher than stated target) http://t.co/utjWKw7P0k
Carolyn B Miciano
20 Dec 14 14:54:28
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IH News Desk
20 Dec 14 14:51:19
$HL Recent News Updated Saturday, December 20, 2014 5:11:24 PM $PFE $T $IBM $FB http://t.co/WVZPhfXFnt
IH News Desk
20 Dec 14 14:51:17
$EBAY News Updated Saturday, December 20, 2014 5:11:24 PM $DXJ $FB $SBUX $TQQQ http://t.co/FHBP192Fon
Twintraderz
20 Dec 14 14:42:14
@traderstewie We like $LNKD and $FB for next week. Great potential!!
MohameD MahmouD
20 Dec 14 14:38:32
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PolgarStocks
20 Dec 14 14:34:40
$XHB Opinions Updated Saturday, December 20, 2014 5:07:26 PM $FXE $JNJ $MO $FB http://t.co/MK55zGggiW
Chet Stedman
20 Dec 14 14:33:06
@ReformedBroker lets address the important issue here...will this help increase their monthly active user # for $FB Q4 earnings?
Stansberry Research
20 Dec 14 14:20:17
Social-media giant $FB is up nearly 40% in 2014.
ZOZO
20 Dec 14 14:19:13
Update $FB daily got and held over 77.00 next step get back and hold over 78.00 http://t.co/gxy74tJ8Dv new chart FB http://t.co/CmDRB13JNV
Jean Fonteneau
20 Dec 14 14:14:02
Not a new report but recommended Holiday reading: KPCB 2014 Internet Trends http://t.co/vvQrvBYRm8 via @kpcb $GOOG $QQQ $FB $TWTR $STUDY
PennyStock Zone
20 Dec 14 14:12:09
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#TrackViral
20 Dec 14 14:09:59
RT @2morrowknight: Picture This: #Instagram Could Be Worth $35 Billion http://t.co/NYuOJ26oJJ #photos #SMWF $FB RT @TIME http://t.co/CTVxH8…
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20 Dec 14 14:02:44
Platinum Memberships Rose, After 528% Gains On Penny Stocks, In One Month! Big Update: http://t.co/2W3yKD2d5Q $F $SIRI $FB
ProVesting
20 Dec 14 13:58:03
$FB: Report: Teenagers from 13 to 17 leaving Facebook http://t.co/ByD6UBGa1j http://t.co/trLkjw0u4Q
Michael Diamondz
20 Dec 14 13:56:06
$fb also getting my attention. Finally getting upside in $prgo but capped myself by selling 160 Jan calls last week. Doh
RB Trader
20 Dec 14 13:51:33
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RB Trader
20 Dec 14 13:51:33
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RB Options Scans
20 Dec 14 13:51:33
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Todd Pace
20 Dec 14 13:50:36
Join us in @super_trades' chatroom or view his watchlist | http://t.co/Bj29lMuDEL | $SPY $FB $AAPL $TWTR $QQQ $BABA http://t.co/7i1IFb3Ma4
MMM
20 Dec 14 13:49:49
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Ross
20 Dec 14 13:44:33
@KymLang do you like $FB at all at this level?
PolgarStocks
20 Dec 14 13:34:11
$IBM Opinions Updated Saturday, December 20, 2014 4:07:23 PM $RIG $FB $EVRM $QCOM http://t.co/7NgNq8G1F4
Langan Stocks
20 Dec 14 13:33:14
$DBA Recent News Updated Saturday, December 20, 2014 4:03:27 PM $DBC $FB $BP $MYEC http://t.co/8tAkhni1c5
PennyStock Zone
20 Dec 14 13:28:00
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John Michael
20 Dec 14 13:26:11
RT @SeekingAlpha: I Am Reducing Facebook To Just 3% Of My 2015 Portfolio http://t.co/E4MtiXpMc5 $FB
Brattle St. Capital
20 Dec 14 13:19:48
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Quantpost Technology
20 Dec 14 13:19:39
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Seeking Alpha
20 Dec 14 13:19:39
I Am Reducing Facebook To Just 3% Of My 2015 Portfolio http://t.co/E4MtiXpMc5 $FB
Alpha Maven
20 Dec 14 13:11:15
RT @IBDinvestors: Facebook leads 4 top stocks on the IBD 50 in Dec. 2013 that are on the elite list today http://t.co/oum0jBnCpG $FB http:/…
Blog Monetizer
20 Dec 14 13:09:28
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jatinam
20 Dec 14 13:06:04
RT @IBDinvestors: Facebook leads 4 top stocks on the IBD 50 in Dec. 2013 that are on the elite list today http://t.co/oum0jBnCpG $FB http:/…
SBR China
20 Dec 14 13:04:59
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moderneconomist.com
20 Dec 14 13:03:49
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20 Dec 14 13:00:54
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Luis Poggi
20 Dec 14 12:59:12
RT @spencerrascoff: Holy cow - Citi internet analyst values @instagram at $35 billion in $FB! Best tech acquisition of all time?! http://t.…
Bobby Wilbert
20 Dec 14 12:58:38
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Digital Burr Media
20 Dec 14 12:58:26
RT @2morrowknight: Picture This: #Instagram Could Be Worth $35 Billion http://t.co/NYuOJ26oJJ #photos #SMWF $FB RT @TIME http://t.co/CTVxH8…
SportsLocate.com
20 Dec 14 12:57:20
RT @2morrowknight: Picture This: #Instagram Could Be Worth $35 Billion http://t.co/NYuOJ26oJJ #photos #SMWF $FB RT @TIME http://t.co/CTVxH8…
				
				
By  +Follow October 4, 2013 5:31AM
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