The number matters beyond vindication because it quantifies how concentrated Facebook's growth engine has become — and it foreshadows the disclosure regime to come: FTC antitrust filings later put Instagram at $22B in 2020 and $32.4B in 2021, while eMarketer projects half of Meta's US ad sales coming from Instagram by 2025.
First-order effects
Facebook enters 2020 with a two-engine ad business: more than a quarter of revenue now comes from an app acquired for $1B, converting the deal from defensive bet to core P&L line.
Brand advertisers get hard confirmation that Instagram is mainstream reach inventory, not experimental spend — budget conversations shift from 'should we' to 'how much.'
Second-order effects
YouTube is pulled into direct competition for the same video and influencer budgets — later FTC-case disclosures showed Instagram's $32.4B in 2021 overtaking YouTube's $28.8B in ad revenue.
Facebook's own roadmap bends toward Instagram's format: the planned full-screen immersive video player replacing the News Feed extends the photo app's engagement mechanics back onto the parent platform.
Third-order effects
Instagram's weight inside Meta becomes the evidentiary core of antitrust scrutiny — the FTC lawsuit relies on exactly these revenue-share figures to argue whether the 2012 acquisition neutralized a future competitor.
If the trajectory holds toward eMarketer's projection of Instagram at 50% of Meta's US ad sales, Meta structurally operates as a two-brand advertising company, with product, hiring, and regulatory exposure split accordingly.
The trend: Instagram is maturing from Facebook's mobile hedge into a co-equal revenue engine whose rising share of Meta's ad business is redrawing both competitive lines and the antitrust debate.
Breaking: Instagram revenue was around $20 billion in 2019, sources tell me. That's more than a quarter of Facebook's sales. That also beats YouTube's $15B. https://www.bloomberg.com/...
@timfullerton
Tim Fullerton on x
Facebook buying Instagram for $1 billion has to be one of the greatest acquisitions of all time - if not the greatest, right? https://twitter.com/...
@caseynewton
Casey Newton on x
And unlike those suckers at YouTube, Facebook keeps all the money for itself! https://twitter.com/...
@marshallk
Marshall Kirkpatrick on x
Instagram is making $20 BILLION dollars a year in advertising? I'll admit, I told them I was disappointed when the founders told me they were pivoting away from building a location sharing check-in app. The location thing seemed cooler. https://www.techmeme.com/...
@jowens510
Jeremy C. Owens on x
LOL, Google officially releases YouTube numbers and Facebook tries to leak Instagram numbers saying they are better. Put it in an SEC filing or it doesn't count, $FB. https://twitter.com/...
@scottcowley
Dr. Scott Cowley on x
Instagram had no revenue model when it was acquired by Facebook. Now, the app is bringing in more than 25% of FB's revenue. https://www.bloomberg.com/...
@dsb
@dsb on x
If you ever wonder why corporations make what appear to be expensive and risky startup acquisitions at the time - this is why. https://www.bloomberg.com/...
@drewaustin
Drew Austin on x
This is insane!!! Instagram and YouTube battling for best acquisitions of all time. https://twitter.com/...
@doubleeph
Tyro on x
Amazing. No wonder I just noticed a couple of days ago that YouTube now has stories, too 🤣🤣 https://twitter.com/...
@jason_kint
Jason Kint on x
Nice little business you got there...it would be a shame if you lost access to all of the core Facebook app's data. https://twitter.com/...
@pkafka
Peter Kafka on x
$20b, with way better margins, because they're not sharing ad dollars with MTV and PewDiePie. https://twitter.com/...
@mgsiegler
M.G. Siegler on x
Implies at least a $150B valuation for IG. Presumably less profitable but also growing faster. (And yes, stand-alone would lack the other benefits of FB infrastructure, but just as exercise.) https://twitter.com/...
@ericjackson
Eric Jackson on x
That's a $400 billion company https://twitter.com/...
@savequokka
Basel on x
Instagram is probably the best deal Facebook made so far.. https://twitter.com/...
@yoda
Drew Olanoff on x
i knew as soon as google broke out youtube someone would get jealous https://twitter.com/...
@stevekovach
Steve Kovach on x
Also, Instagram doesn't have to pay most of that $20 billion back to its users. YouTube does. https://twitter.com/...