Instagram Disrupts Snap by cloning most of its features

In April 2012, Facebook (NASDAQ:FB) acquired 18-month-old Instagram, which had only 30 million users and no revenue. At that time, $1 billion worth of deal seemed too big for a small startup like Instagram.

But years later, the photo filter app boasts of having more than 600 million users and is proving to be a strong growth engine. Instagram is giving stiff competition to market debutant Snap (NYSE:SNAP). Shares of Snap, the parent company of Snapchat, fell 1.2% at $19.97, after Instagram announced its Snapchat-like Stories app has more daily users – as many as 200 million daily active users.

In 2013, FB offered SNAP a whopping $3 billion in an acquisition offer, which was eventually rejected by Snap. Now, after Snap’s IPO from February 2017, Facebook’s Instagram could be its biggest threat. Snap opened up at $24, up 41% from its initial public offering price of $17 per share, but over a period of time, got hit by a “sell” rating.

While Instagram may be considered an aggressive competitor for Snap, for Instagram this competition may not be as rough. Clearly, the photo filter app has a big advantage: Facebook’s existing and loyal user base which keeps growing. Over a period of time, Facebook has acquired more than 50 companies including WhatsApp, Instagram, and Messenger, all of which currently engage a huge audience through innovative features and user-friendly technology.

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