Facebook’s acquisition of Instagram is set to boost the social media giant’s ability to sell ads to consumers via mobile.
While Facebook has previously touted its ability to reach millions of users, Instagram is a relatively small company that has been struggling to get its users to use its service.
Facebook acquired Instagram for $1 billion in May.
Since then, Instagram has experienced massive growth in both users and revenue.
According to the company, Instagram generated $5.3 billion in ad revenue in the first nine months of 2017.
While Instagram has been able to drive revenue from its user base by selling ad space in the photo-sharing app, its reach in advertising is more limited.
Facebook’s move into the space could help Instagram grow its ad revenue significantly, and perhaps even more significantly, the acquisition could help it compete against other companies in the space.
For example, Twitter’s Instagram-focused account is currently valued at $1.4 billion, according to TechCrunch, but Facebook has also been able a few months ago to acquire the company’s mobile ad business, and now the social network is in a position to compete with the mobile giant for that revenue.
Instagram has more than 6 million users, and more than 1.3 million of those users are mobile users.
Instagram was valued at about $1 per user on the market in 2017, but it is expected to grow revenue by $500 million to $1 a user this year.