When Facebook (NYSE:
) acquired Instagram for
, many investors wondered if the company had
for the photo-sharing app. Some argued that Facebook had to pay top
dollar for the company to prevent its owners from seeking other
buyers. Apple (NASDAQ:
) was among the companies that were rumored to be interested in
Those firms are surely glad they missed out on the opportunity
to buy Instagram. The app -- which has 43 million MAUs (monthly
active users) -- lost 3.5 million of its daily active users,
dropping from roughly 16 million to 12.4 million DAUs. According to
, the decline occurred over the last seven days.
More than one week ago Instagram announced that it would place
user images in advertisements without consent. Facebook is
reportedly behind the
, which enraged users all over the world -- including
pseudo-celebrities like Kim Kardashian.
"I just don't think they should have the right to sell [our
photos] to advertising companies on our behalf," Kardashian told
. "What if we don't want to advertise what they want?"
While she may not be the most reputable person to complain about
unwarranted advertising (she
every time she tweets about select products), Kardashian has a
point. No company should be allowed to take users' image and drop
them into advertisements. It is wrong, it is borderline illegal and
it should not be allowed.
Nonetheless, this is the world that consumers (and celebrities)
are forced to live with now that social media has taken over.
Will this really hurt Facebook? The stock is currently down more
than two percent. Before investors cry a river, however, it is
important to remember that Facebook has one billion users
worldwide. They are not going anywhere. There may be alternatives
like Google+ (NASDAQ:
), but no one cares about them. They may survive but they will not
top Facebook any time soon.
For that to occur, one of two things would have to happen.
Either a competitor would have to improve upon everything Facebook
created and produce a true revolution within social media, or
Facebook will have to become so unbearable that users cannot help
but abandon the service. Until then, the social network will
continue to thrive.
Some traders believe that this could present an opportunity for
) photo-sharing service, flickr, to make a comeback. Investors
should not get their hopes up. According to AppData, the service
of its DAUs over the last seven days. Only 60,000 DAUs remain,
along with 400,000 MAUs. With numbers so low, Facebook and
Instagram do not have anything to worry about.
After enduring a number of complaints, Instagram announced on
December 20 that it would
users' images to advertisers. That adjustment did not prevent the
photo-sharing app from losing a few million users.
(c) 2012 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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