As a domain expert in the field of technology valuation and market analysis, I am well-versed in the intricacies of how companies like Instagram are valued and their impact on the broader tech landscape. The valuation of a company, especially in the tech sector, is a complex process that involves a myriad of factors including user base, revenue models, growth potential, competitive landscape, and the overall market sentiment.

When Citigroup analysts valued Instagram at $35 billion, they were likely considering these factors. Instagram, with its massive user base of 300 million at the time, was a significant social media platform that had integrated itself into the daily lives of millions. The platform's user engagement was high, with people spending considerable time on the app sharing photos, videos, and interacting with others. This level of engagement is a crucial metric for advertisers and marketers, making Instagram an attractive platform for monetization through advertisements and sponsored content.

Moreover, Instagram's growth trajectory was impressive. The platform was consistently adding new users, and its features were evolving to meet the changing needs of its audience. This growth potential is a key factor in valuation, as it indicates the company's ability to capture a larger market share and increase its revenue over time.

The valuation also took into account Instagram's relationship with Facebook. As a part of Facebook's ecosystem, Instagram benefited from the resources, technology, and expertise of one of the world's largest social media companies. This association likely contributed to its valuation, as it provided a level of stability and growth support that independent companies might not have.

However, it's important to note that valuations can be subjective and are influenced by market conditions. The $35 billion figure was a snapshot in time, and the actual value of Instagram could fluctuate based on various factors such as changes in user behavior, competition from other platforms, and shifts in the broader economic environment.

In conclusion, the valuation of Instagram at $35 billion by Citigroup was based on a comprehensive analysis of its user base, growth potential, monetization capabilities, and its strategic position within the Facebook ecosystem. It's a testament to the platform's strength and the significant role it plays in the social media and digital marketing landscape.

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Citigroup Says Instagram Is Worth $35 Billion. ... 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.Dec 19, 2014read more >>