Is Snapchat – the social media app famous for its disappearing messages – in danger of doing a vanishing act of its own? It’s a question some are asking after investors turned on the company again this week following a second set of poor results which have turned a once-hot tech company into a stock market casualty.
The losses alone were steep. Snapchat’s parent, Snap Inc, lost $443m over the last three months, compared with $116m in the same period a year ago. Young tech companies are expected to burn through cash at a prodigious rate as they chase customers, but the main worry for shareholders was anaemic user growth, missed revenue targets and the threat from Facebook and Google – both of which have copied some of Snapchat’s key features. Imitation may well be the most sincere form of flattery, but in this case it could also be the most deadly.
Snap Stumbles Through Another Disappointing Quarter
Ever since Snap, the maker of the messaging app Snapchat, went public in March, the company has become a closely watched barometer for Silicon Valley and Wall Street.
The technology world is scrutinizing Snap as an indicator of whether smaller social media companies can compete with behemoths like Facebook. And Wall Street is using Snap to gauge whether investors will embrace other unprofitable tech companies if they go public.
Why Facebook's New YouTube Rival Faces Very Different Challenges
Facebook is making a big effort to boost its video presence with the launch of Watch, a new subsection of the social media giant's feature lineup meant to serve as a destination for original episodic shows. Facebook is introducing Watch to a limited number of people in the U.S., and the company hasn't specified when it will roll out more broadly.
Watch is essentially a personalized hub for video content that Facebook will curate and recommend based on the massive interactions that happen daily on the platform. For example, Watch will include a “What's Making People Laugh” category that offers up shows in which many viewers have picked Facebook's “Haha” reaction. “Most Talked About” highlights video content that's generated a lot of conversation on Facebook, while the self-explanatory “What Friends Are Watching” serves up shows that are popular with your friends.