(Credit: Screenshot by Jason Parker/CNET)
Ever since Facebook snapped up the photo-sharing service Instagram -- a price that began at $1 billion but ended up at $715 million due to Facebook's sagging stock price -- Facebook watchers have been looking for ways that the company will make money from Instagram.
The obvious path -- although certainly not the only one -- is by sprinkling ads across Instagram. That strategy, according to Sterne Agee analysts Arvind Bhatia and Brett Strauser, could generate $500 million to $700 million in advertising revenue over the next three years. Even better, they argue in a report today, those would carry wide margins for Facebook.
The analysts, who in November put a price target of $32 a share on Facebook's stock based on the company's ability to make money from mobile, pointed out that Instagram could also begin competing with companies like Shutterfly, which sell photography products and services.
Their optimism around putting ads on Instagram comes after ... [Read more]
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