Instagram's app remodel places more emphasis on its TikTok clone Reels and its growing e-commerce business, CNBC's Julia Boorstin reported on "Squawk Alley."
What Happened: The Facebook, Inc. (NASDAQ:FB)-owned social media property added new shortcuts on its main page for Reels and shopping.
Instagram not only takes "a cut of transactions" on sales, but it represents a new advertising venue for brands, platform head Adam Mosseri told CNBC in a statement.
"Showing ads in a shopping space is going to be theoretically more valuable because you're showing ads in a space where people have a higher intent to actually purchase or buy," the statement said.
Over time, Reels short videos will feature ads, although it is in a "catch up" phase right now, the exec told CNBC.
E-commerce has been identified as a new opportunity for Facebook, and investors celebrated previous announcements. The social media platform's launch of Shops in May helped send the stock to new all-time highs.
Why It's Important: Facebook's emphasis on e-commerce shopping with its platforms represents an opportunity for small-and-medium-size businesses to diversify their selling exposure, said "Squawk Alley" co-anchor Jon Fortt.
Instead of a small business selling almost exclusively through its own website or Amazon, it can now sell across the core Facebook platform and Instagram.
Photo courtesy of Instagram.