Facebook's (FB) Instagram Stories Boasts 250M Daily Users
Zacks Investment Research | Jun 21, 2017 08:53AM ET
Facebook Inc’s (NASDAQ:FB) photo-sharing service, Instagram's rivalry with Snap Inc’s (NYSE:SNAP) Snapchat is heating up. Reportedly, in a span of two months, the social media service’s feature, Instagram Stories, has added 50 million daily active users (DAUs), taking the total count to 250 million. In addition, Instagram said that it has launched a feature whereby users can now share replay of their live videos in Stories.
This is definitely not good news for Snapchat. In its last earnings, the company reported Snapchat having 166 million DAUs. Notably, it added only 5 million DAUs in fourth-quarter 2016, as well as last quarter, which happens to be the lowest since third-quarter 2014. User growth holds the key to attracting advertisers, which is the primary source of revenues for Snap. A slowdown in user base growth rate may look unattractive to advertisers.
Snap, after a strong IPO debt has failed to keep the momentum going. This has polarized Wall Street’s opinion of the stock, with the majority having cautious sentiments. Interestingly, analysts have related the slowdown in Snapchat’s user growth to the popularity of Instagram Stories, a blatant rip-off of the former’s hallmark feature.
In August last year, Facebook added the “Stories” feature – a slideshow of photos and videos that vanishes after 24 hours – to Instagram. “Stories” proved to be a massive hit, with 200 million daily actives by Apr 2017. This prompted Facebook to add the same on Messenger as well as its main platform. Not just Stories, the company has also added a lot more features that are eerily similar to Snapchat, like augmented reality (AR) filters, hashtag stickers, and direct messaging features (enabling users to send text and disappearing photos and videos in the chat section).
According to analysts, this is a brilliant case of a copycat improvising better than the original. Facebook not only introduced Snapchat-inspired features but made it more popular than Snapchat. Tech Crunch observes that Snapchat’s focus on a single demography (millenials) as well as absence of a proper international expansion strategy has cost it dear.
Analysts have long maintained that Facebook always had an upper hand at unveiling features that are similar to other social media services. This is because if these “inspired” features do not work, Facebook can easily roll them back like it has done previously with Poke, Slingshot and Bolt.
After all, platforms like Facebook, Instagram, WhatsApp and Messenger do have their own inherent features that will prevent them from losing users. A worldwide presence is another added factor. Facebook, Messenger and WhatsApp boast one billion plus users each, while Instagram, with 700 million users, is fast catching up.
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