Published: Fri, May 19, 2017
Money | By Armando Alvarado

Will Snapchat's New Features Make It More Useful for Marketers?


Snap (SNAP) posted its first quarterly report as a public company on Wednesday and the results shed light on numerous social media upstart's vulnerabilities: Snap is struggling to maintain user growth and its path to profitability remains unclear.

In its first financial earnings announcement since its IPO, Snap Inc has failed to meet analyst expectations, following the well-trodden path of Facebook and Twitter, and resulting in a 20% drop in share price after the earnings call. See a trend here? The company's stock, which was heavily talked about and one of the most valuable tech IPOs in recent years, tumbled in after-hours trading. "That's going to continue". "But I do think at this point, we're pretty much ahead in terms of the technology that we're building". Twitter, Windsor says, doesn't face major competition in "microblogging and related messaging", whereas Snap "competes head-to-head with Facebook", which can afford to outspend it.

In addition, Snapchat is also losing twice as much money as it was this time past year. The company had aimed to accrue a further two million new users. For example, JPMorgan Chase expected the daily active users to reach 169 million.

He said that improvements to the performance of the Android app led Snapchat to double the amount of net additional Android devices on the network, and Android accounted for 30 percent of net additional users in the quarter. The company's "man-child CEO" is the "most frightening issue for investors in its shares", who "have no recourse but to pay the tuition for the CEO's on the job training", he writes at Forbes, also citing Snap's "undisciplined growth strategy".

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To grow revenues, Snap will focus on widening its programmatic business to all advertisers - large and small - via a self-serve programmatic tool released last week. So, the choice is to keep up with the younger generations and "their evolving behaviors and attitudes", or grow up with its original audience as it ages, said Jessica Liu, an analyst at Forrester Research.

Since the Snap IPO, Facebook has been very aggressive about copying Snapchat.

Shares of the parent company of Snapchat were down on Thursday following the earnings report.

"Whatever the new thing is, they should acquire that", he said.

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