Facebook Develops Meme Hub and Instagram as Core Revenue Falls

23rd January 2019 Scott Harvey

A team of analysts at Jefferies have predicted that Facebook’s growth will fall below 20%+ for the first time in quarterly earnings released next week. In something of a strategy pivot, the social media giant may become more reliant on Instagram and its other properties to pick up the slack.

Instagram looks set to pass $14 billion in revenues for the year, up some 60%. The boost comes from an increase in ad dollars, with the app driving monetisation around the same time as WhatsApp in 2018. The user base has now crossed the 1 billion mark, up from 30 million when it was purchased by Facebook in 2012.

Despite the success, the decision to push monetisation may have hastened the departure of co-founders CEO Kevin Systrom and CTO Mike Krieger – TechCrunch reports that the entrepreneurs wanted a high level of autonomy.

In addition to pushing Instagram, Facebook is trying various strategies to recapture teen audiences from YouTube and Snap. IGTV and Facebook Watch have both been widely regarded as flunks thus far, but the introduction of a new meme hub called ‘LOL’ marks a different approach to the video space.

LOL divides its content into categories including “Animals,” “Fails,” and “Pranks”. When browsing, users are encouraged to rate each video “Funny”, “Alright”, or “Not Funny”. It is not yet clear whether it will be a subsection of Facebook or a standalone app, but Zuckerberg and co. have confirmed its beta test.

There are still public data concerns surrounding Facebook: concerns which arose following 12 months of scandals including the Cambridge Analytica controversy. COO Sheryl Sandberg acknowledged that “[those at Facebook] need to stop abuse more quickly and do better to protect people’s data” at a speech in Munich over the weekend.

The analysts put Facebook at a “Buy” rating, however, predicting that the stock could climb around 20%. They said: “We see upside to pricing, users, and impressions as Instagram continues to improve its advertising efforts across the entire advertising funnel.”