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| Facebook Nears |
Facebook continued its nearly month-long march up this week, as investors grow increasingly bullish about the social network’s potential. Besides being added to the S&P 500, Facebook is finally seeing its $1 billion purchase of photo-sharing site Instagram begin to pay off.
On Thursday, Instagram announced new features under the title Instagram Direct that will allow private group messaging. Users will be able to send photos to a select group, rather than expose them publicly, and chat about the images as well. The move comes as the competition for private message services heats up. Snapchat rejected a $3 billion all-cash offer from Facebook to go it alone, and Twitter pumped new life into its direct messaging service recently as well.
“We believe Instagram Direct has the potential to drive greater engagement among existing users and could bring new users to the platform that may have shied away from the prior, more public sharing model,” UBS UBS -0.27% analyst Eric Sheridan wrote in a new note.
Instagram’s initial wave of ads in the News Feeds also showed promise uniting bringing advertisers together with users. UBS cites a study by Curalate that found paid posts generated an average of 32x more Likes than typical brand posts.
Beyond Instagram, Facebook’s new roll-out of auto-play News Feed video and gif posts on Apple's AAPL -1.1% iOS and Google's GOOG -0.83% Android platforms has great potential as a money-making source online. Sheridan believes that the new video product could be a test ahead of a broader video advertising rollout. He has a Buy rating on the stock, with a price target of $62.
As of 11:52am EST, Facebook stock was up 9.57% on the week. The share price, touching above $52.50, is nearing Facebook’s all-time high of $54.22 set back in October.
Via: Forbes
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