Facebook Inc (FB): A Look at Instagram’s Revenue Potential

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Of course, Facebook’s purchase of Instagram was just as much a defensive move and an effort to create future synergies as it was a move to lock in future earnings potential. Still, exercises like this are useful when evaluating Facebook. A bet on Facebook is a bet on expansion into new categories. Advertising alone won’t promote Facebook into its lofty valuation. Visionary founder and CEO Mark Zuckerberg is going to need to create synergies and new streams of revenue to meet shareholders’ expectations.

When you’re thinking about Facebook’s future, don’t stop at advertising revenue for the company’s popular social network. How far can Facebook take Instagram? What other new areas might the company explore?

The article A Look at Instagram’s Revenue Potential originally appeared on Fool.com and is written by Daniel Sparks.

Fool contributor Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook, LinkedIn, and Pandora Media. The Motley Fool owns shares of Facebook and LinkedIn.

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