Instagram Didn’t Lose a Quarter of its Users, But it Is at Risk

Analytics suggest that Instagram is losing its members after last week’s backlash against its changing terms of use.

The mobile photo sharing service’s users outraged over new rules made good on their threat to dump the popular app. Photo: Bakerella/Flickr

Recent reports claim that Instagram has already lost 25% of its daily active users as a result of the incident, which had Instagram and Facebook fans to reject from using the services in protest.

According to figures from AppData, Instragram which was acquired by the social networking giant earlier this year, may have shed nearly a quarter of its daily active users in the wake of the debacle.

While the famous photo sharing service wasn’t willing to disclose statistics to the contrary, it did dismiss the AppData numbers altogether.

A company’s spokesperson said in a statement: “This data is inaccurate. We continue to see strong and steady growth in both registered and active users of Instagram.”

Instagram, which had previously had 16.4 million active daily users the week, changed his policy, the move which decrease the number of its fans to 12.4 million as of yesterday.

Last week saw the news that the photo sharing site decided on changing its terms of service to pave the way for advertising.

Instagram announced Thursday it has turned back to language in the advertising section of its terms of service that appeared when it was launched two years ago.

“It became clear that we failed to fulfill what I consider one of our most important responsibilities – to communicate our intentions clearly. I am sorry for that, and I am focused on making it right,” Instagram’s CEO, Kevin Systrom, said in a statement.

“Because of the feedback we have heard from you, we are reverting this advertising section to the original version that has been in effect since we launched the service in October 2010.”

Some users were concerned that the move would mean that the popular service would allow users’ photos to be displayed in advertisements. Instagram’s CEO cleared up that concern.

“I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos – you do,” he said.

After learning of the new terms, many users announced that they would stop using the service.

Even after the statement, National Geographic and other famous companies said they would reevaluate their use of the service.

“Instagram needs to do some serious damage control to repair what was a pristine, ‘for the users’ brand,” Patrick Moorhead, principal analyst at Moor Insights & Strategy, told ABC News.

Regardless, Instagram, which was acquired by Facebook for $1 billion last year, will begin to start advertising. It just might do it in some different ways.

“Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work,” Systrom said.

“Instagram, like all mobile properties, needs to drive revenue and they will turn to advertising,” Moorhead said. “This will turn away some users at first but, like Facebook and Twitter, users will adjust and not flee en mass.”

Instagram’s policy, which was set to take effect next month, suggested that Facebook wanted to integrate Instagram into its ad-serving system.

“These services are publicly advertised as ‘free,’ but the free label masks costs to privacy, which include the responsibility of monitoring how these companies sell data, and even how they change policies over time,” explained Chris Hoofnagle, director of Information Privacy Programs at the Berkeley Center for Law & Technology.

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