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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
Skinny Asian Dude
25 Oct 14 05:00:01
RT @MatthewPhillips: Switcheroo. Zuck Vs. Bezos, in market capitalization. $FB $AMZN http://t.co/rSqXVpm2QN
Sepi
25 Oct 14 04:51:18
@TheDomino hi Dom what is your call on $twtr earnings coming up? Everyone high on $fb no news on $twitter!
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25 Oct 14 04:45:49
Top 4 Signs the Stock is a Scam http://t.co/ttcBMo9ZS4 #stocks #trading $FB $GPRO $LNKD http://t.co/E0j6YmQxEu
Financial Iceberg
25 Oct 14 04:35:29
Technical Observation of the Day: New High on Facebook - $FB http://t.co/nQraLgiiPl
Nero The Red
25 Oct 14 04:31:01
@JonathanHoenig stop them with $FB &TWTR policy... They should not want their site to be used for that purpose.
HotKeyTrading
25 Oct 14 04:30:03
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25 Oct 14 04:13:03
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Financial Iceberg
25 Oct 14 04:05:05
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25 Oct 14 04:00:11
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wininstocks2014
25 Oct 14 03:53:43
FB 80.67 Stock Charts $FB Facebook Inc. Cl A (NASDAQ) Last Updated: 10/25/2014 05:53:42 FB Stock Chart - 1 Mon http://t.co/3H7QG3AeoS
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25 Oct 14 03:52:16
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IVolatility
25 Oct 14 03:50:00
Actionable Options for Fri, Oct, 24 TWTR $FB http://t.co/VwAPuPyKiY
innov8v
25 Oct 14 03:31:52
new entries monday... $EXR w/51.14 stop, $CRL w/56.22 stop, and $FB w/71.3 stop...
JordanGeorgiou
25 Oct 14 03:30:20
Can someone explain to me how $FB just keeps on rising...?
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25 Oct 14 03:16:03
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25 Oct 14 03:02:53
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25 Oct 14 03:01:44
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25 Oct 14 03:01:32
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Diego D'Aquilio
25 Oct 14 03:01:29
Stephen Hawking Joins #Facebook $FB, Likes 'The Theory of Everything' http://t.co/LSueUbeatV
Jazz Katz
25 Oct 14 02:59:48
So $FB Facebook is worth 15% more this week than last week at this time..mmm OK
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Pacmick
25 Oct 14 02:34:38
RT @FluentInFinance: #Yahoo is now the 3rd largest mobile advertising company in the world https://t.co/FnowofxR20 $YHOO $GOOG $FB $MSFT ht…
Maleah
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okosa
25 Oct 14 02:09:58
Mark Zuckerberg added $712m y'day, most among world's 200 richest, as $FB debuted new app http://t.co/QCAoZSK7Eh http://t.co/J8nj0LuYUg
Bullimalinna Sot
25 Oct 14 01:36:58
got to make sure the bill pay first, then I can work on some personal projects. Few gigs left of October. Beat $AAPL, $BABA, $FB too :)
Marko Hristov
25 Oct 14 01:21:11
Twitter Q3 Might Show Payoff From New Products http://t.co/maN22IHkVK #IBDNews via @IBDinvestors $TWTR $FB $GOOGL
Wavepatterntraders
25 Oct 14 01:19:08
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Pivot Point Trading
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25 Oct 14 01:04:27
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25 Oct 14 00:56:57
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PsicoLibreUned
25 Oct 14 00:14:44
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NWC
25 Oct 14 00:13:36
@jimcramer your price target for $FB was $90. I'm glad you no longer believe so much in the company. Yeah sell at $80.
Chimp
25 Oct 14 00:11:57
RT @IBDinvestors: Did the Twitter 'buy' button make $TWTR a buy? Earnings due Monday http://t.co/i9NgNX0Vag $FB $GOOGL
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Cal
24 Oct 14 23:52:32
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24 Oct 14 23:12:29
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24 Oct 14 22:31:45
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24 Oct 14 22:12:43
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Dan Nathan
24 Oct 14 22:08:57
ICYMI: Name That Trade - $FB: Liking Protection http://t.co/RnTADoapIU
				
				
By  +Follow October 4, 2013 5:31AM
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