Facebook Announcement: Video Instagram? (Update 1)

Tickers in this article: FB YHOO
Updated from 9:49 a.m. EST to provide Facebook response and updated stock price.

NEW YORK (TheStreet) -- Facebook is gathering up the press for a major product announcement on Thursday, asking attendees to "join us for coffee and learn about a new product." But those attendees may not be attending a Facebook event, after all.

TechCrunch reported that the Facebook announcement would be nothing to do with an RSS reader, as many have suggested, but in fact related to Instagram, the popular photo-sharing social network Facebook purchased last year.

According to the sources, Instagram will be getting video. That would help it compete with Twitter's Vine service, which has been gaining traction in recent weeks, and is now the No. 4 free app on Apple's App Store. It would also differentiate Instagram from Yahoo!'s Flickr photo-sharing app, which recently received a major overhaul.

Facebook declined to comment for this story.

There are a lot of "Instagram-like" services for video now, such as Cinemagram and Socialcam, but none of them have really taken off. The only service that has taken off is Vine, with its six-second video clips. If Instagram was to offer something similar in terms of duration, as well as the popular filters it offers on its photos, that would give ita distinct advantage over the other services.

Instagram getting a video component would be a huge coup for Facebook, not only with its 100 million users but as a business. Instagram could wind up being an enormous platform for brands, as they show off their wears to users. Using photos is one thing, but video advertisements generate even higher revenue dollars, and if brands flock to Instagram as they already have (Nike is one great example), that may wind up boosting revenue for Facebook once Instagram finally starts to generate revenue.

On Facebook's last earnings call, CEO Mark Zuckerberg noted that Instagram is not worried about about generating revenue right now, but there's potential down the line.