One of the social media portals that has already taken the world by storm is Instagram, and it is one of the contenders for having the most number of daily active users. It took Facebook about 8-years to reach 1-billion monthly active users, and in 2014, that same company purchased WhatsApp as Chief Executive Officer and co-founder Mark Zuckerberg thought the messaging application also had the potential to reach approximately the same number of monthly users. At the time of purchase, WhatsApp had 450-million users, and it recently did reach 1-billion monthly users. So it does beg the question, when will Instagram follow suit? Furthermore, does it really need to?
Does Instagram Need 1-Billion Monthly Active Users?
Over the past few years, the growth of Instagram is nothing short of phenomenal. Back in March of the year 2014, the app had 200-million active users. Jump to today, at the time of writing, it has approximately 500-million monthly active users. If the social media portal were to add 100-million more users every nine months with little to no problem, then it would put it to a straight path to reach 1-billion monthly active users within the next four years.
A research from John Blackedge, an analyst from Cowen & Co., shows that the Instagram app is actually adding new users at a faster rate today than it was over a year ago. His data shows approximately 366,000 net new user additions per day as compared to 350,000 per day when this particular social networking portal had 300-million users. However, his forecast did show signs of slowing growth over the next five years. Despite the app increasing his recent estimates, Blackedge does not see it reaching 1-billion users within the next 5-years. He estimates it to just fall short of that goal to about 986-million.
But does Instagram really need to have 1-billion monthly active users? Even if it has about 500-monthly active users, it is still one of the largest social media platforms. Furthermore, Facebook is already monetizing it. The company opened its API about a year ago, and it has now over 200,000 active advertisers. This number is more than what Twitter has. Analysts predict that it will bring in $1-billion to $2-billion in ad revenue for this year and the next. Therefore, even without the bump in the number of new users, it still stands to benefit from a whole lot of them. Hence, shareholders need not worry if user growth will slow down within the next couple of years.
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