When Facebook recently reported a slowdown in growth, its share price dropped 20%, while Twitter has been battling growth concerns for the last few years, which have dragged down the company’s valuation. Given this, the latest earnings report from Snap Inc. does not paint a good picture for the company.
After going public only 17 months ago, the camera company has posted a decline in active users, dropping from 191 million daily actives last quarter to 188 million today. That’s not good news – Snap’s growth momentum was a key strength, the app’s key value proposition being that it has (or had) a strong, and growing, hold on younger audiences who were turning away from Facebook.
Now, even with Facebook data controversies regularly dominating the headlines – when you’d think users would be most actively seeking alternatives – Snap is actually seeing less use. In terms of why the app isn’t being used as much, its controversial redesign is being blamed as the main culprit, with Snap pointing the finger at unpopular changes which they’ve been working to resolve.
But of course, the larger narrative here is that Facebook – mostly via Instagram Stories – has taken the wind out of Snapchat’s sails, and has now effectively nullified the app’s momentum. It’s impossible to know which is more true, but definitely Snap’s redesign stumble came at the worst possible time.
But it’s not all bad news for Snap. The company also reported a 44% year-on-year revenue increase, and a 48% YoY jump in ad revenue. Read more from socialmediatoday.com…
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