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When Facebook bought Instagram for $1 billion in 2012, critics of the social network said the deal was another sign of Silicon Valley overreach.

Instagram, a photo-sharing app with just 30 million users at the time, had no revenue. Facebook, still a private company at the time, was making its biggest and riskiest deal yet. And few start-ups, let alone apps, were valued at $1 billion or more.

Less than three years later, Facebook looks prescient. Silicon Valley is awash in billion-dollar start-ups, and Instagram is valued at $35 billion.

According to Citigroup analysts, Instagram, which now has 300 million users, accounts for about 16 percent of Facebook’s roughly $221 billion market value.

“Using what we believe to be conservative assumptions around user growth and monetization, we believe Instagram is worth $35bn,” the analysts wrote in a report on Friday. They had previously valued Instagram at $19 billion.

Though Facebook has only recently introduced ads on Instagram, the Citigroup analysts believe the app could soon be a meaningful contributor to Facebook revenue.

“While Instagram is still early in monetizing its audience and data assets and its financial contribution to FB is minimal today, we believe that it is quickly gaining monetization traction and would contribute more than $2bn in high margin revenue at current user and engagement levels if fully monetized,” they wrote.

Though they don’t state it explicitly, the analysts are saying that Instagram is worth more than another high-flying social media company, Twitter, which is valued at about $23.5 billion after a year as a public company.

“Not only is Instagram’s audience now larger than Twitter, but its users are 1.8x more engaged, and user growth has been greater,” they write. “Instagram is at the early stages of rolling out advertising, but we believe brands have and will find it an effective channel.”

As a result of the increased valuation of Instagram, the Citigroup analysts raised their price target for Facebook stock to $91, up from $86. Facebook shares were trading around $79 on Friday morning, up 45 percent on the year.

Facebook’s purchase of Instagram now looks like a bargain, but it can’t yet say the same about its acquisition of WhatsApp, which it acquired for $21.8 billion earlier this year. WhatsApp remains a loss maker.

It is also unlikely that WhatsApp will see the same 35 times appreciation in value that Instagram has apparently had under Facebook’s watch.

Were that to happen, WhatsApp would be valued at $763 billion, making it the most valuable company in the world.