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Instagram gains users in December despite recent uproar as Zynga gets pecked to death by rivals

Published Dec 27th, 2012 11:35AM EST
Instagram Zynga Market Share

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Zynga (ZNGA), the Facebook (FB) app behemoth, still reigns supreme on its most important platform. But the erosion of its dominant position continues as smaller rivals keep chipping away at its market share. On December 26, Zynga-owned Facebook applications had 267 million Monthly Active Users, down 20 million in two weeks. Far behind it followed Microsoft (MSFT) with 70 million MAU, with 65 million MAU and Instagram with 43 million MAU.

But whereas Zynga lost nearly 7% of its Monthly Active Users in the two-week run-up to Christmas, Microsoft managed to inch up by 700,000 users, by 600,000 users and Instagram by 2.1 million users.

Of course, the Facebook crackdown on aggressive customer acquisition techniques has limited the growth of all third-party app developers. But the most important of Zynga’s smaller rivals have been able to avoid the kind of MAU erosion that is now plaguing the Facebook app champion.

What really pops out from Christmas Facebook app trends is the way Instagram has been able to ride a wave of negative publicity to perky 5% monthly user growth over the past two weeks.

The tsunami of wrath and sarcasm unleashed on Twitter has not reversed Instagram’s momentum. It might even be possible that floating an outrageous-sounding privacy policy and then quickly reversing it could have simply increased Instagram’s brand recognition and piqued consumer interest among those who are not deeply involved in app trends.

This certainly adds some piquancy to the breathless commentary about Instagram’s “fatal blunder” and “possibly irreversible damage.”[bgr-post-bug]

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.