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Analysis-Facebook usage dips for first time. Will Instagram follow? -Breaking

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© Reuters.

Elizabeth Culliford & Paresh Dave

(Reuters] – TikTok’s pandemic, India’s mobile data cost and other factors all contributed to people leaving Facebook (NASDAQ) last quarter at an incredible rate. It is now up to Instagram when it will be their turn.

Insider Intelligence, a forecaster, doesn’t think Meta Platforms Inc will lose Instagram users within the next three year. However, its November forecasts show that Instagram’s monthly growth will be 5.8% and 3.1% this year respectively from 16.5% in 2017.

Instagram was acquired by the tech company in 2012 for $1B. Revenue from Instagram ads has become increasingly important to Meta.

These funds will be used to build a new company selling virtual reality goggles, and other metaverse technology. Mark Zuckerberg could lose his ambitions as Meta Chief Executive due to a drop in Instagram usage and the inability of raising ad prices.

Meta reported Wednesday that fewer people visited Facebook each day in the quarter than the previous year. This was the first such time since the third month of 2021. This was just one of many troubling indicators that led to shares dropping by 26% Thursday.

On Wednesday, Meta Chief Financial Officer Dave Wehner told financial analysts that a part of the decline in usage for Facebook’s main app and website was due to fewer COVID-19 locksdowns. These lockdowns have been known to cause a surge in internet activity. Rising internet prices in India, as well as the increasing popularity of TikTok’s video-sharing application ByteDance Inc are some of his reasons.

Meta doesn’t break down Instagram usage often, but analysts claim that TikTok may be hurting Instagram growth.

Facebook and Instagram (to a certain extent) have overcame many challenges, including data privacy issues, scrutiny regarding the well-being of users, and competition. Snap Inc (NYSE:)’s Snapchat, Twitter Inc (NYSE:), and many more over the years.

In fact, Instagram has invested billions in video-related features such as Reels, a TikTok-like option. Zuckerberg told analysts Wednesday that Reels was its fastest growing content format “by far” and the biggest contributor to engagement growth on Instagram.

Analysts predict that Reels will eventually be a more lucrative revenue source than text ads and photos. Zuckerberg said that Reels was not yet popular enough to generate the same ad sales as other features.

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