Facebook Inc.-owned photo-sharing app Instagram continues to go from strength to strength, with one analyst today valuing the service at $100 billion.

That’s 100 times more than the social network giant paid for the company in 2012, as Instagram’s user numbers continue to surge and the company has launched a new dedicated video service.

The figure comes from Bloomberg Intelligence analyst Jitendra Waral, who said in a report that Instagram, which recently surpassed 1 billion monthly active users, is likely to book revenue of more than $10 billion in the next 12 months. That would account for 16 percent of Facebook’s annual revenue, up from 10.6 percent last year.

Much of the revenue growth comes from Instagram’s demographics skewing younger. Facebook itself has been reported to be losing younger users in the U.S. to competing services, initially Snapchat.

But with Instagram adopting many of Snapchat’s best features over the last 12 months, those users are now flowing to the Facebook-owned app. “Instagram’s audience is younger than its parent, making it more attractive to advertisers,” Waral noted. “And unlike Facebook, Instagram is still growing in the U.S.” Waral estimated that Instagram should reach 2 billion users within the next five years, surpassing Facebook itself.

The news came five days after Instagram announced IGTV, a service aimed at leveraging its audience to take on the Google LLC-owned YouTube in the video business.

Initially allowing “creators” to upload videos of up to 60 minutes long, IGTV extends on the limited video support of up to 10-minute videos already offered by Instagram. It’s a dedicated app and also is accessible from Instagram’s existing app.

Differentiating itself from YouTube, IGTV will only offer vertical videos. The format is considered awful by some because “it doesn’t capture any of the surroundings of the subject,” but it’s apparently popular among millennials.

The service will not initially offer advertising, though Instagram Chief Executive Officer Kevin Systrom (pictured) said that since creators are investing a lot of time into IGTV videos, he wants to make that sustainable by offering them a way to make money in the future. Many so-called Instagram “influencers” make their money through direct sponsorships, so that may not be as big an issue as it seems.

“Instagram knows it can’t possibly challenge YouTube on desktop (yet), but it does know that if you’re using Instagram, you’re on your phone, so why not give you an easy way to watch videos of the people you follow without needing to swap out to another app?” said Jonathan Lee at Inverse.

Photo: Instagram