Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Facebook Inc. (FB) Raises Instagram’s Reach by 1100%

Facebook Inc. (NASDAQ:FB) may be having a difficult time monetizing its own ubiquitnousness and turning its 900 million users into 900 million dollars per month, but the brand seems to have a very positive effect on other companies – especially those that Mark Zuckerberg buys and takes over.

Facebook Inc. (FB)

Facebook Inc. (NASDAQ:FB) worldwide visibility has paid off big for its most recent addition, Instagram, which was bough for a little less than $1 billion (23,000 shares of stock plus about $300 million cash) when the deal was finalized last week. Instagram was an up-and-coming company when Zuckerberg approached Instagram this past spring with the purchase offer. Before the offer, Instagram had just nine employees and essentially no revenue, boasting less than 900,000 daily active users (DAUs).

About six months later, and Instagram now can brag about 11 million users daily – using a calculator, that is an increase of traffic of more than 1,100 percent. An 11-fold increase in daily traffic.

And due to the lowered value of Facebook Inc. (NASDAQ:FB) stock at the close of the sale last week compared to when the stock was offered during the spring (with an IPO value of $38 each), and this deal seems like even more of a steal than it might have looked at even $1 billion.

Was there something that the Facebook Inc. (NASDAQ:FB) CEO knew about his brand that others did not, when some criticized the amount of money Zuck offered for Instagram? At this point, it seems so – it seems that Zuck might have knows that his company was going to provide much more visibility for Instagram than it was getting on its own, and he knew that the Instagram business relies heavily on users and views – which as been the Facebook Inc. (NASDAQ:FB) model all along.

Now, if only both companies can figure out the monetization thing, then there likely will be a bounce in the stock for investors like George Soros of Soros Fund Management.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.