Was the news of Instagram's decline greatly exaggerated?

In December, the New York Post reported that Instagram was bleeding daily active users, part of a backlash to a controversial revision of the company's terms of service that allowed it to sell user-generated photos to advertisers. Users had been understandably outraged. Justin Bieber told his 5 million followers he was leaving the service for good. (He didn't.) National Geographic, in unusually dramatic fashion, briefly suspended its popular account too. All in all, it was bad news for mobile's biggest success story, and it only got worse when third-party analytics firm AppData told the Post that Instagram had lost a mind-boggling 4 million daily active users due to the controversy. But as we reported back then, those numbers were highly questionable.

On Friday, for the first time in months, Instagram released an analytics report, and confirmed what many suspected — the company is doing just fine. Growing, even, up 10 percent from December to January. Here's what the report revealed:

• 90 million monthly active users

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• 40 million photos per day

• 8,500 likes per second

• 1,000 comments per second

"Instagram continues to see very strong growth around the world," Instagram co-founder Kevin Systrom told AllThingsD. "With many of the product and internationalization improvements we've made, we’ve been excited to see these efforts resonate with users globally."

What happened? Why was the Post's December report so off target? Well, AppData cribs its data from Instagram users who actively connect their accounts to Facebook. Most users don't do this, so the sample size was too small to begin with. Also, the third-party service's metric for daily active users is different from monthly active users, which is the standard across the web. As Mike Isaac at AllThingsD points out, many people don't use Instagram every day. Perhaps many users were in transit, which would be typical for late December. Or maybe they were busy running around doing some last-minute holiday shopping. Who knows?

In any case, it looks like the photo service is doing fine. (Shameless plug alert: The Week is on Instagram! Give us a follow.) On Thursday, the company formally announced that by the end of the week it would roll out a rewritten terms of service without the hazy language about user-generated photos and advertisers.

So far, so good. We'll keep an eye on Bieber though. Just in case.