Social Media

Facebook’s Instagram hits 400M users, beats Twitter

Major milestone for Instagram
Major milestone for Instagram

Facebook-owned Instagram has hit 400 million monthly active users, making it far larger than rival Twitter, as the social networking site looks to boost advertising revenues from the service.

It took nine months for the photo-sharing app to rack up its latest 100 million users in which celebrities such as soccer star David Beckham and former athlete Caitlyn Jenner joined the service, Instagram said in a blog post on Tuesday.

Among the last 100 million to join, more than half live in Europe and Asia with Brazil, Japan and Indonesia adding the most Instagrammers. The app said 75 percent of its users live outside of the U.S.

Advertising surge

The latest numbers will be a big boost for Facebook as it looks to monetize Instagram. It has recently introduced a number of features such as sponsored posts and is planning to introduce targeted ads too. Advertising revenue generated by Instagram will hit $600 million this year, and jump over 146 percent to reach $1.48 billion in 2016, eMarketer estimates. Instagram ad revenue will account for 14 percent of Facebook's total mobile ad revenue in 2017, eMarketer predicts, highlighting how key the standalone app will become for the social networking site.

Instagram is Facebook's only other wholly-owned platform which carries advertising and it's being received positively by potential clients, analysts said.

Instagram hits new milestone
Instagram hits new milestone

"Instagram reaches a different audience so that has an appeal to advertisers and they are selling it as a separate product as a branding tool," Ian Maude, head of digital media at Enders Analysis, told CNBC by phone.

"The feedback I've had from media buyers on Instagram has been pretty good. I think we are going to see revenues on Instagram rise very quickly."

Facebook has a number of standalone apps, all which have been growing very quickly. Facebook Messenger has 700 million users, while WhatsApp – the instant messaging app Facebook acquired for $19 billion in 2014, recently hit 900 million monthly active users.

Twitter slowdown

Instagram's growth comes at a time when social media firm Twitter is struggling to draw users to its platform. The micro blogging service reported earlier this year that its monthly active user numbers hit 316 million in the second quarter, up 15 percent year-on-year.

Interim CEO Jack Dorsey admitted that he was . Analysts said that Twitter's slowing growth was not just about the rise of rivals like Snapchat or Instagram, but more about its own business model.

"I think the concerns over Twitter are more general, i.e. it's not about Instagram, it's about while its growth has stalled, other social media, other instant messaging and communications services and tools continue to grow and it's being outgrown and outpaced and I think that is the worry," Maude said.