Business, Finance & Economics

Instagram: report that the mobile app has lost 25% of users is questioned


The Instagram logo as seen on an iPhone Dec. 18, 2012, in Fairfax, CA.


Justin Sullivan

Instagram and social media observers are questioning a report that came out this week that claims that the social network lost 25 percent of its daily users because the company irritated them by changing its terms of service earlier this month, the Los Angeles Times reported.

According to the LA Times:

The change would have allowed the social network to let companies pay to place users' photos in advertisements that would run within the Instagram app.

Following an outcry from Instagram users, the company withdrew the changes on Dec. 18, the LA Times reported.

More from GlobalPost: Instagram: Not our intention to sell your photos

However, a report from metrics company AppData published by the New York Post on Thursday showed that Instagram had 4 million fewer daily users on Dec. 24 than before the changes, the San Jose Mercury News reported.

The New York Post reported that AppData was "pretty sure the decline in Instagram users was due to the terms of service announcement," according to the San Jose Mercury News.

On Friday, Instagram and others argued that AppData had got it wrong.

"This data is inaccurate," an Instagram spokeswoman told the LA Times. "We continue to see strong and steady growth in both registered and active users of Instagram."

Some noted that AppData's figures only tracks users who log into Instagram using their Facebook account, a small fraction of the mobile app’s total users, the San Jose Mercury News reported. Also, it was possible that the decline in Instagram use might be related to the Christmas holiday, observers argued.

Indeed, on Friday, AppData released a statement admitting as much, the Wall Street Journal reported. “The drop between Dec. 24 and 25 seems likely to be related to the holiday, during which time people are traveling and otherwise have different routines than usual,” AppData said. “A number of other apps saw similar trends, including Skype, Pandora, Pinterest and Yelp.”

Facebook stock dropped as much as 3.5 percent on Friday, as the report circulated, but finished the day 3 cents higher than Thursday's closing price as the report was unpacked, the San Jose Mercury News reported.