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Facebook Inc (NASDAQ:FB)’s Instagram Initiatives Applauded By Analysts

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Facebook Inc (NASDAQ:FB), recently came out with clear updated plans to monetize Instagram like “expanding to action-oriented ad formats, enabling more targeting, and opening the platform up to advertisers of all sizes.” Based on this, Raymond James analyst Aaron Kessler maintained its Outperform rating on the social networker with a price target of $90.

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Instagram to attract advertiser’s interest

Instagram is looking to ramp its growth from the select group of brands, which will help it to monetize. Kessler noted that the expanded advertiser base, better targeting and preferring more direct response ads will help the group further. The analyst said that Instagram has a user base of over 200 million daily users in the first-quarter, and given such large scale and attractive demographics, the analyst expect Instagram inventory to be “in high demand from advertisers.”

Citing discussions with a Facebook Inc (NASDAQ:FB) marketing partner, Kessler noted significant client interest since Instagram announced the broader advertiser launch on Monday. With Instagram announcing new service, Kessler is optimistic on the social networks ability to expand from a single platform to a multiplatform suite (Facebook, Instagram, Messenger, WhatsApp, Oculus). Kessler is estimating revenue from Instagram to come in at $500 million in 2015, and grow $1.1 billion in 2016 and $2 billion in 2017.

Facebook Lite, has long-term revenue potential

Separately, Facebook Inc (NASDAQ:FB) is making some sincere efforts to connect with the audiences in the emerging world. The social networking site recently unveiled new app for the Android phones called Facebook Lite, in order, to focus on the emerging countries.

Noting this development, Sterne Agee CRT analyst Arvind Bhatia said that Facebook is one of those companies that is looking to find new audiences that will sign up for Facebook once it is readily available in that part. “It’s part of Facebook’s desire to reach as wide an audience worldwide as possible,” Bhatia said.

According to the analyst the move is not much focussed on revenue because the emerging countries are the one with lower GDP, instead the company is looking to make revenue in the long-term by expanding their user base and continuing to ramp up the engagements in countries that may otherwise not be able to access the social networking site. Facebook Lite has been rolled across Asia, and is slowly making its way into Latin America, Africa and Europe in the coming weeks.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.