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TECHNOLOGY Thursday 11 May 2017

Snap plunges after 1Q report as Facebook’s shadow looms

BARBARA ORTUTAY have to broaden its reach
AP Technology Writer to include older people.
NEW YORK (AP) — Face- “Right now they clearly
book has been bent on have a loyal user base in
copying Snapchat ever the younger population,
since the social media gi- but the over 30 year old
ant tried unsuccessfully in demographic is one of the
2013 to buy what was then most attractive segments
an ephemeral photo-mes- for advertisers because of
saging app. their spending power,” Eric
Now, the company be- Kim, managing partner at
hind Snapchat is bent on venture capital firm Good-
becoming more like its big- water Capital, wrote in a
ger rival — at least when report.
it comes to success — by Of course, the downside of
courting new users and that is that teens don’t nec-
with them, advertisers. essarily want to be using
It’s not doing so well. the same messaging and
Snap Inc. reported a mas- socializing tools that their
sive loss and a continued parents and grandparents
slowdown in user growth, are using. So, the choice
while revenue fell below is to keep up with the
Wall Street’s expectations In this Thursday, March 2, 2017, file photo, Snapchat co-founders Bobby Murphy, left, and CEO younger generations and
in its first quarterly earnings Evan Spiegel ring the opening bell at the New York Stock Exchange as the company celebrates “their evolving behaviors
as a public company. its IPO. Associated Press and attitudes,” or grow up
Wednesday’s results come with its original audience
just a week after Facebook Facebook’s shadow con- lieves Snapchat has “got- it with just one other per- as it ages, said Jessica Liu,
reported solid first-quarter tinues to hang over Snap- ten ahead of itself” in push- son, if you wanted. This sets an analyst at Forrester Re-
results, with double-digit chat, which is still best ing out new features, when it apart from its rivals, but search.
revenue growth — as it has known for disappearing what it does best — and could also make it more “If they attempt to tackle
consistently since its initial messages even though it what it’s most used for — is difficult for businesses to both, Snapchat will discov-
public offering in 2012. has evolved to become one-on-one messaging. target ads to its users based er that meeting the needs
Snap had a net loss of $2.2 much more. When Face- “If you ask any teen how on their personal connec- of a 15 year old vs. a 30
billion in the January-March book reported they use Snapchat, (most) tions. year old will be very differ-
period. About $2 billion of it Growth in Snapchat’s user say they use it to text Britton sees challenges for ent,” Liu said in an email.
was for IPO-related stock base slowed down last people,” Britton said. “I Snapchat’s non-messaging
compensation costs. A year after Facebook’s Ins- think texting, one-on-one, features, such as stories TO COPY OR BUY?
year earlier, before going tagram copied Snapchat’s they have their audience and a “discover” option As Facebook keeps copy-
public, it lost $38.8 million. “stories” feature, which lets hooked. That’s going to that lets users keep up with ing Snapchat, what can
Snap lost $2.31 per share in users post short video clips continue.” news, sports or celebrities. Snapchat do to stay
the first quarter, compared that disappear after 24 He said he’s seen a lot of These features aren’t what ahead?
with 14 cents a year ago. hours. Not to miss out on teens replace the tele- many users go to Snapchat “They need to acquire the
Revenue nearly quadru- the trend, Facebook also phone icon at the bottom for. next Snapchat — compa-
pled to $149.6 million from launched disappearing of their phones’ most-used Snapchat, like Facebook, nies that are doing one
$38.3 million, but it’s less stories this year. apps with the Snapchat is also experimenting with thing right,” Britton said.
than the $158.3 million that And let’s not forget about app. Why call when you augmented reality, a This could be an app such
analysts polled by FactSet WhatsApp, the Facebook- can snap, after all? blending of the virtual and as Houseparty, a group vid-
were expecting. By com- owned messaging service physical worlds, but it’s eo chat app that’s popular
parison, Facebook’s rev- that came out with “sta- NOT A SOCIAL NETWORK still hard to tell how that with teens, or Musical.ly, a
enue was $1.18 billion in tus,” which lets people post Snapchat’s Stanford-drop- will make money or have video social network that
the second quarter of 2012, photos and videos that dis- out CEO, Evan Spiegel, has broad appeal. lets people create and
its first earnings report as appear after 24 hours. See long insisted that his com- share short music videos.
a public company. Snap- a trend here? pany is not a social network GROWING UP “Whatever the new thing is,
chat reported 166 million ALL ABOUT THE MESSAGING but a “camera company.” As popular as Snapchat is they should acquire that,”
daily active users in the last Matt Britton, CEO of social Unlike Facebook, Twitter with young people, they he said.
quarter. In its first post-IPO media marketing com- or Instagram, Snapchat won’t be young forever. And the cycle continues, as
report, Facebook had 552 pany Crowdtap and an isn’t connecting networks If the company wants to Facebook won’t be far be-
million daily users. expert on millennials, be- of people. You could use grow its user base, it will hind in copying that, too.q