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Instagram hits 500 million monthly users

USA TODAY USA TODAY 21/06/2016 Jessica Guynn

Instagram more than doubled in size over the past two years © Andrew Harrer/Bloomberg Instagram more than doubled in size over the past two years Instagram now reaches more than 500 million people each month and 300 million each day, lengthening its lead over Twitter and underscoring Facebook's beachhead of popular mobile apps with escalating growth around the globe.

Instagram more than doubled in size over the past two years, adding 100 million active users faster than the previous 100 million, the Facebook-owned photo-sharing service said. More than 80% of users are from outside the U.S. On average, more than 95 million photos and videos are shared each day. 

The growth announcement underscored the deepening straits for Twitter, which is struggling to revive growth yet is stuck at about 300 million monthly users. Instagram hit 400 million users in September. 

Facebook has spread its tentacles into the messaging boom after building the world's most popular social network, buying Instagram for $1 billion in cash and stock in 2012. Facebook also owns two other of the world's most popular apps: WhatsApp, which it bought for billions and has 1 billion users, and its homegrown app, Facebook Messenger, which hit 900 million users in April. 

"Facebook itself captures enormous amounts of people’s attention on their mobile devices, and that’s hugely powerful. But there will always be alternatives either in broad use or in use by demographic or geographic segments," said Jan Dawson, chief analyst with Jackdaw Research.

Instagram, for example, is popular with teens. 

"Facebook has arguably been deploying the candy bar strategy — own as many of the brands on the shelf as possible to maximize your market share," Dawson said.

The exception: Snapchat, the mobile app popular with young people which Facebook tried to buy twice.  

"It remains to be seen how important that miss will be, but it’s already clear that it’s a really important competitor to Facebook for people’s time and attention, and for companies’ ad dollars," Dawson said. 

The jump in Instagram users — and their advertising-pleasing demographics — has helped Facebook bill Instagram as a buy for marketers looking to increase awareness and spur sales. Evidence of its early commercial promise: Instagram already has more than 200,000 advertisers. Analysts say Instagram's nascent advertising business is growing rapidly.

Research firm eMarketer expects Instagram's global mobile ad revenue to reach $1.53 billion this year and more than $5 billion by 2018. Analysts say Instagram's contributions are already being felt in Facebook financial results even though the giant social network does not break those out. 

"What is certain is that Instagram has been a big factor in Facebook’s recent repeated blowing out of its financial results, and its impressive rate of revenue growth in particular," Dawson said.

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