Instagram hits 2 billion monthly users amid recent scrutiny

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Instagram has now hit the 2 billion monthly user milestone. CNBC’s Salvador Rodriguez was the first to report on the achievement and joins ‘Power Lunch’ to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi 

Instagram’s addictive content has U.S. lawmakers so concerned that Adam Mosseri, CEO of the social media service, was dragged to Congress for the first time last week, the latest incident in a year of turmoil at the photo-sharing app.

But despite that controversy, Instagram reached a new milestone of 2 billion monthly active users this fall, according to sources familiar with the situation.

The topic of Mosseri’s hearing before a Senate Commerce subcommittee was child protection online, an issue that’s battered Instagram’s image in the past few months.

Even with all the negative publicity, the hugely popular app is more critical than ever to the fate of its parent company, now called Meta.

Instagram hasn’t made its user numbers public since it crossed the 1 billion monthly active users mark in June 2018, and it has avoided touting its growth at a time when legislators and regulators already see Facebook as having outsized market control. It took eight years to cross that threshold and only three years to clear 2 billion MAUs.

Employees, who asked not to be named because they weren’t authorized to speak on the matter, told CNBC they learned of the 2 billion users number in internal conversations. One person said Instagram reached the figure about a week before Facebook changed its name to Meta in October.

A company spokesperson declined to comment.

Instagram launched in 2010 and was acquired by Facebook for about $1 billion two years later, as the centerpiece of CEO Mark Zuckerberg’s effort to move from the web to mobile.

“That’s a pretty significant compound annual growth rate of users,” said David Heger, an analyst at Edward Jones.

Heger said the speed of expansion to 2 billion users is particularly important given the hefty competition that’s emerged from TikTok, which has surged in popularity by making it simple for people to create and share short, funny videos.

“It tells me that even with the challenge of TikTok recently, Instagram is still certainly relevant to people,” Heger said.

According to findings of a survey published last month by Forrester, 63% of Americans between the ages of 12 and 17 used TikTok on a weekly basis this year, compared with 57% for Instagram. In terms of downloads, TikTok was installed 596.1 million times globally this year across Apple and Google devices, topping 570.7 million installations for Instagram, according to SensorTower.

“TikTok did an extraordinarily good job of winning at that youngest demographic over the past four or five years,” said Daniel Newman, principal analyst at Futurum Research, which focuses on digital technology. “It did to video sharing and short-video sharing what Snap did to messaging and disrupting that particular demographic.”

Zuckerberg responded the way he often does — by cloning the competition. Facebook launched the Reels video-sharing feature in August 2020. In its third-quarter earnings report in October, the company said it would make Reels a core part of Facebook and Instagram services to try and appeal to users between the ages of 18 and 29.

Blessing and a curse

But Facebook’s effort to lure young users to Instagram and to try keeping them for longer periods of time is what has the company squarely in the crosshairs of regulators, legislators and increasingly concerned parents.

In September, The Wall Street Journal began running a series of articles based on a trove of documents leaked by whistleblower and ex-employee Frances Haugen that included claims that the social media giant knew of reports that the app was detrimental to teenagers’ mental health and was doing little about it.

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