Breaking Finance News

Instagram Video Taking Market Share from Vine

CNBC is reporting that since the introduction of Instagram’s new video feature, the number of Vine videos has dropped dramatically.

On Thursday, Facebook (NASDAQ: FB) held a media event where it announced that Instagram, a company it bought for more than $1 billion, would add the ability to upload 15 second videos. Instagram’s co-founder Kevin Systrom said that it’s “the same Instagram that we know and love … but (now) it moves.”

Twitter, however, does not love Instagram. Twitter purchased the company that has become popular for it’s short, 6 second videos. After learning of Instagram’s reported jumped into the short-video space, it went on the offensive and announced that it was adding new features but that doesn’t appear to be enough to mitigate the damage.

On June 15, Vine had 2.9 million shares but on June 21, the day after Instagram video was debuted, shares dropped to 1.35 million. Even worse, on the same day Vine spiked, Instagram shares on Twitter surpassed Vine shares on Twitter. In other words, users left Vine to embrace Instagram.

Facebook investors drove the stock higher on the news. Shares finished about 4 percent higher last week on the back of this news. Analysts and investors may be thinking that Facebook is getting into this growing trend at the right time.

Disclosure: At the time of this writing, the author had no position in the above named equities.

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