Because Of TikTok, Pandemic And Cellular Costs In India, Facebook Users Drop Drastically, Instagram How?

The TikTok rush and the Pandemic, in the opinion of Meta Platform inc, are down drastically. (photo: doc. unsplash)

JAKARTA - TikTok, the pandemic and mobile data charge in India, has helped people stay away from Facebook at an unprecedented rate in the last quarter of last year. Then when is Instagram's turn?

A forecaster, Insider Intelligence, previously never expected the social media service Instagram owned by Meta Platforms Inc. to lose users in the next three years. But last November's forecast showed Instagram's growth in monthly users would fall to 5.8% this year and 3.1% in 2025 compared to a 16.5% decline last year.

Instagram, which the tech giant acquired in 2012 for $1 billion, has been seen as an antidote to Facebook's slowing growth. Even revenue from advertising on Instagram is now increasingly important to Meta.

Meta Platform Inc put the funds into building a new business selling virtual-reality glasses and related metaverse technologies. The decline in Instagram users and the inability to raise ad prices could stop Meta Chief Executive Mark Zuckerberg's ambitions.

Now fewer people check their Facebook, every day per quarter than they did the previous year. This trend is for the first time during the last three months of 2021, said a Meta source as quoted by Reuters on Wednesday, February 2.

It was one of several troubling signs, along with below-expected earnings and a disappointing earnings outlook, that ultimately plunged Meta shares over 26% on Thursday, February 3.

Meta's Chief Financial Officer, Dave Wehner, on Wednesday, February 3 told financial analysts that part of the decline in usage for Facebook's main app and website has come from the COVID-19 lockdown, as the pandemic is likely to result in an explosion of online activity instead.

Instead, Wehner blamed rising internet costs for consumers in India and growing interest in ByteDance Inc's video-sharing app TikTok.

Meta doesn't regularly stop using Instagram, but analysts say TikTok is also disrupting Instagram's growth.

Facebook, to some extent, and Instagram have overcome previous challenges, including data privacy catastrophes, surveillance over user welfare, and competition from Snap Inc's Snapchat, Twitter Inc, and many others over the years.

Indeed, Instagram has invested billions of dollars into video-related features, such as a TikTok-style option called Reels. Zuckerberg told analysts last Wednesday that Reels is the fastest-growing content format "by far" and the biggest contributor to engagement growth on Instagram.

Analysts say Reels could eventually become a bigger revenue generator than ads placed on photo and text posts. But in the challenges ahead, Zuckerberg noted, Reels isn't yet popular enough to attract the ad sales that older features do.