Instagram to start placing ads in US users photo streams

Instagram announced it will start placing ads in US users photo streams in a posting on its website.

“We have big ideas for the future, and part of making them happen is building Instagram into a sustainable business,” the photo sharing service said.

Ads will appear in a few months and involve just a handful of firms.

Instagram was bought by Facebook for $1 billion, but has never made a profit.

The company, which now has 150 million users, has been a favorite among consumers but has long left analysts wondering how it could turn enthusiasm among photographers into a business model.

Early efforts by Instagram to generate revenue were met with user backlash, such as when the company changed the terms of service to seemingly indicate that it would own user images and could sell those images to advertisers.

The failure of this move was acknowledged in the company’s posting.

“As always, you own your own photos and videos. The introduction of advertising won’t change this,” it said.

Social media advertising is a booming business in the US.

According to research firm eMarketer, advertisers will spend $9.5 billion on social network ads worldwide this year.

Facebook has boosted its efforts to gain a larger share of this ad spending.

This year, the company’s share of global mobile ad revenues will rise to 15.8% from 5.35% last year.