Instagram exceeded Twitter in terms of daily users last month; now it looks like that has trickled through to its valuation.
The photo-sharing app has been valued at $35bn by Citi analyst Mark May, nearly double the amount he previously estimated.
Based on Twitter's current share price, it's worth just over $23bn.
Instagram was bought by Facebook founder Mark Zuckerberg in 2012 for around $1bn, when it had 100m active users. Now it has 300m.
As a result, it has the potential to drive revenues within the Facebook group far more significantly than previously thought, May said.
“While Instagram is still early in monetizing its audience and data assets and its financial contribution to Facebook is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2 billion in high-margin revenue at current user and engagement levels if fully monetized,” he wrote in a note issued today.
Citi has raised its price target for Facebook to $91 from $86 as a result.
Next year could be a particular boom year for the business. May reckons 2015 will be the first year that Facebook begins to develop “more meaningful off-Facebook revenue streams”, including Instagram.
Here is how those valuations compare with other social media platforms this year:
This is what it looked like back in 2008. Obviously many of the multi-billion dollar businesses dominating the industry were just twinkles in their creator's eyes six years ago.