In case it wasn't clear by now, Facebook's (NASDAQ:FB) Instagram is crushing Snap's (NYSE:SNAP) Snapchat. It was plain to see in April, when Instagram Stories hit 200 million daily active users (DAUs), surpassing Snapchat's DAU base just a few months after launching. At that time, Snap had yet to report its first public earnings release, and the most current figure at that point was that Snapchat closed out 2016 with 158 million DAUs.
Shortly thereafter, Snap reported first-quarter results and disclosed that it added 8 million DAUs in the first quarter, bringing its total DAU base to 166 million. Unfortunately for Snapchat, Instagram Stories just hit 250 million DAUs.
A quarter-billion and counting
Facebook's vice president of global marketing solutions told CNBC today that Instagram Stories has now hit a quarter of a billion users that create Stories on a daily basis. That's a meaningful chunk of the 700 million monthly active users (MAUs) that the broader photo/video sharing service now boasts. Importantly, Instagram's user growth -- both in terms of Stories DAUs and Instagram MAUs -- appears to be accelerating. Instagram Stories enjoyed an initial spike immediately following its launch last August, grabbing 100 million DAUs in just two months. It took approximately three months to add the next 50 million DAUs, three months for the 50 million after that, and just two months for the last batch of 50 million.
It's worth pointing out that there are minor differences in how Instagram and Snap report DAUs. Instagram periodically discloses its user figures once it hits a milestone, and doesn't detail the methodology behind how it measures or calculates DAUs; Snapchat reports the average number of DAUs for the entire quarter. That being said, even if you were to adjust for those discrepancies (which public investors can't do without the internal data), the difference would be negligible. What's far more important are the trends that each platform is seeing, and the chart above makes it abundantly clear that Instagram Stories is benefiting at Snapchat's expense. Instagram Stories now has 50% more DAUs than Snapchat, and that lead will likely only widen.
Snapchat's sequential DAU growth, while posting an uptick last quarter to 5%, is still rapidly decelerating. It's not a coincidence that Instagram Stories is seeing its own sequential DAU growth accelerate. Furthermore, the inherent network effects of these platforms only mean that the current trends will likely persist going forward. If a Snapchat user sees many of their friends migrating over to Instagram Stories, there's a good chance that user will follow suit.
Even though social media platforms aren't necessarily mutually exclusive, there's also little point to spreading out your usage between two platforms that essentially do the exact same thing, which is precisely why Facebook's replication efforts are so powerful.
Mark Zuckerberg isn't giving up on destroying Snapchat anytime soon.
Evan Niu, CFA owns shares of Facebook. Evan Niu, CFA has the following options: long January 2019 $20 puts on Snap Inc. and long January 2018 $120 calls on Facebook. The Motley Fool owns shares of and recommends Facebook. The Motley Fool has a disclosure policy.