Despite recent reports, the Facebook user base is not shrinking. Here’s a quick look at monthly active users from yesterday’s earnings deck:
There’s an elasticity of scale that I think $FB has reached that will protect it from mass exodus from the platform no matter how many ads they paste to its pages.
Its so huge that it doesn’t matter anymore if the cool kids migrate elsewhere because it has secured so many graphs that are intertwined and the cost of leaving now outweighs the cost of a deteriorating user experience.
This is a profound achievement – scale as an elastic factor.
Instagram, however, while its getting really big (100m active monthlies), has not necessarily reached this level of scale. I use the term necessarily because really I have no idea how big it needs to be to ensure scale as an elastic factor though I am sure Zuckerberg has a pretty good feel for it.
There must be immense pressure to begin monetizing Instagram.
Meanwhile, the experience without such meddling remains simple and magical so it will grow and that growth will serve as a positive feedback loop and inch it closer to being immune from mass migration away from it.
Zuckerberg has resisted the pressure to monetize Instagram and he will continue to until it surpasses escape velocity and that is long term smart.