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Snapchat Launches Re-design

November 9, 2017 by  
Filed under Around The Net

Snap Inc is redesigning its disappearing-message app Snapchat hoping to attract a broader audience, going back to the drawing board as Wall Street clobbered it for another quarter of slowing user growth.

The Venice, California-based firm, whose March stock market debut was the hottest of any tech stock in years, reported revenue and user growth for the third quarter well below Wall Street expectations as it struggles to compete with Facebook Inc’s Instagram.

Snap has disappointed investors each quarter of its brief existence as a public company.

User growth in the last three months was well below what investment analysts expected. Daily active users rose to 178 million in the third quarter from 173 million in the second quarter. Analysts had expected 181.8 million, according to research firm FactSet.

Chief Executive Evan Spiegel said the company was launching the redesign after hearing for years that Snapchat was difficult to understand or hard to use.

“We are going to make it easier to discover the vast quantity of content on our platform that goes undiscovered or unseen every day,” Spiegel told analysts on a conference call.

The 27-year-old CEO said there was a “strong likelihood” the redesign would be disruptive in the short term, but said Snap was willing to take the risk for long-term gain.

Such a radical change so soon after an IPO is unusual.

Snap is not the only social media company looking to revive growth by changing its look. Microblogging service Twitter Inc said on Tuesday it would roll out 280-character tweets to users across the world, double the length of its iconic 140-character tweets.

Asked on the analyst call what Snapchat’s redesign would look like, Spiegel said the company had been studying the evolution of mobile content feeds such as Twitter streams and the Facebook News Feed and saw room for a “personalized content service.”

Spiegel said the company next year would also build more tools for people to share with broad audiences beyond their friends, the type of public broadcasting common on Instagram and Twitter.

“It seems like a significant amount of change in a short period of time,” analyst Rich Greenfield of BTIG told Spiegel on the call. He asked what led to the shifts.

Spiegel said Snap needed to evolve rapidly. “We’re just not afraid to make changes in the long-term interest of the business,” he said.

Snapchat Popularity Waning, Growth Slows

November 8, 2017 by  
Filed under Consumer Electronics

Snapchat’s growth has come to a near crawl.

Snap, the company behind the social network, saw daily active users climb by 5 million in the third quarter — just 3 percent growth from the second quarter and 17 percent from a year ago — bringing the total to 178 million.

That trails the 300 million daily users on rival Instagram stories. Instagram’s parent, Facebook, boasted a year-over-year 16 percent growth rate, but off a base of more than 2 billion users.

The numbers illustrate the fact that Snapchat still faces stiff competition from Facebook and Instagram. While Snapchat has been successful in attracting younger users, it remains a mystery to a broader audience. Its array of filters and the idea of disappearing messages presents an intimidating barrier for people trying it out.

On the other hand, Facebook’s Instagram Stories continues to grow at an impressive clip.

“One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback,” Snap CEO Evan Spiegel said Tuesday in a prepared statement, adding that the company is planning a redesign to make the application easier to use.

“We don’t yet know how the behavior of our community will change when they begin to use our updated application,” Spiegel said. “We’re willing to take that risk for what we believe are substantial long-term benefits to our business.”

More bad news: Snap also took a $40 million charge to write-down unsold Spectacles.

The company reported a loss of $443.2 million, or 36 cents a share. Excluding one-time items, Snap lost 14 cents a share, narrower than the average analyst estimate of a loss of 15 cents a share, according to Yahoo Finance.

A year ago, the company lost $124.2 million, or 15 cents a share.

Snap’s revenue rose more than 60 percent to $207.9 million, but still fell far below analysts’ expectations of $239.5 million.

Facebook Acquiring TBH Social Network

October 18, 2017 by  
Filed under Around The Net

Facebook wants to woo teens back to its site.

The tech giant announced plans to acquire tbh, a social network popular with teens that let people send compliments to each other through anonymous quizzes. Facebook didn’t disclose an acquisition price.

Facebook will let tbh, which stands for “to be honest,” operate as it did before, similar to how it runs the photo app Instagram and chat app Whatsapp.

“When we met with Facebook, we realized that we shared many of the same core values about connecting people through positive interactions,” tbh said in a blog post. “Most of all, we were compelled by the ways they could help us realize tbh’s vision and bring it to more people.”

Facebook confirmed the acquisition. “Tbh and Facebook share a common goal — of building community and enabling people to share in ways that bring us closer together,” a Facebook spokeswoman said in a statement. “We’re impressed by the way tbh is doing this by using polling and messaging, and with Facebook’s resources tbh can continue to expand and build positive experiences.”

Tbh became a darling among young people this summer. The company says it has 5 million users, who have shared more than a billion messages on the app.

By letting tbh continue to operate as a standalone app, Facebook seems to be following the same playbook it did with Instagram, which it bought in 2012 for $1 billion. Now, Instagram is one of the world’s most well-known social apps, and has 800 million monthly users.

Facebook has been looking to appeal more to young people as rival Snap, parent of Snapchat, continues to grow. Last week, Snap announced a feature called Context Cards, a visual search tool for Snapchat. In 2013, Facebook CEO Mark Zuckerberg famously offered to buy Snapchat for $3 billion, but was spurned by CEO Evan Spiegel. Snap went public earlier this year.

Snapchat Reports Slowing User Growth

May 12, 2017 by  
Filed under Around The Net

Snap Inc shares took a deep dive after the owner of Snapchat reported slowing user growth and revenue in its first earnings report as a public company, missing some Wall Street estimates as it competes with copycat messaging apps.

Shares tumbled 23 percent in after-hours trading to wipe some $6 billion from Snap’s market value, a reversal for the company after a red-hot March initial public offering that was the biggest for a U.S. tech company since Facebook Inc’s 2012 debut.

The stock fell to $17.66, just above its IPO price of $17.

Some investors were hoping Snap would surprise them with big numbers in its first quarterly report, BTIG analyst Richard Greenfield said.

“The fact that they failed to live up to expectations, let alone exceed them, disappointed people,” he said.

The performance echoed slides in Facebook and Twitter after they posted debut scorecards following their IPOs. Twitter shares cratered 24 percent the next day, while Facebook’s tumbled 11 percent, still the biggest-ever one-day losses for both.

Snap Chief Executive Evan Spiegel sought to reassure investors during an earnings call, fielding a dozen questions that ranged from strategy to how it would deal with competitors.

He also did not shy away from one query that allowed him to take a feisty jab at Facebook.

“If you want to be a creative company, you’ve got to get comfortable with and enjoy the fact that people are going to copy your product if you make great stuff,” he said.

Making a comparison to the search industry, Spiegel added: “Just because Yahoo has a search box doesn’t mean they’re Google.”

Snap said its daily active users (DAUs) rose 36.1 percent to 166 million in the first quarter from a year earlier, marking a slowdown from the 47.7 percent rise for the fourth quarter and 62.8 percent jump for the third quarter that the company reported in its IPO filing.

The slowing rate of growth was in line with an estimate from JPMorgan, which accurately expected 166 million DAUs for the first quarter. Monness, Crespi, Hardt & Co Inc had pegged them even higher at 173 million.

Snap’s March IPO priced above the company’s target range as investors put aside concerns about a lack of profits and voting rights to get a piece of the action. The IPO raised $3.4 billion and gave the company a market valuation of roughly $24 billion, and shares surged 44 percent in their first day of trading.

Snapchat Daily Video Viewing Business Booming, Closing In On Facebook

November 10, 2015 by  
Filed under Around The Net

The number of videos viewed each day on Snapchat has tripled since May to 6 billion as the messaging app is erasing the gap with social media giant Facebook Inc, according to a report in the Financial Times that cites people close to the company.

The Financial Times said that Snapchat confirmed the 6 billion figure but had declined to comment further.

Facebook said last week that it had doubled daily video views to 8 billion from 4 billion in April, according to the report, which notes that social networking groups are vying for eyeballs in the fast-growing video segment.

Facebook’s daily video viewing number is made up of both desktop and mobile views while Snapchat’s is entirely made up of smartphone users, the report notes.

Snapchat CEO Evan Spiegel said in May that the company plans to have an initial public offering but did not specify when that would happen. In 2013, Snapchat turned down a $3 billion offer from Facebook to acquire the company.