As quoted in Wall Street Journal:
Inside Instagram: Facebook likely won’t disclose how much money it’s making from advertising on Instagram, which it acquired for roughly $1 billion in 2012. Facebook has been running ads on the photo sharing app since November. Even if relatively small, some analysts want to know what kind of impact Instagram is making on Facebook’s bottom line.
Rebecca Lieb, an analyst for Altimeter Group, says it isn’t so much the dollars that Instagram is bringing in now, but what it represents: the mobile phone equivalent of a nice, glossy magazine. That’s the kind of thing brands love. “Brands spend the most on advertising and invest the most in the richest campaigns,” she says.