Business

Twitter, meet Snap: Your new comrade in calamity

By Oliver Smith 11 August 2017
Snapchat founder Evan Spiegel. Image: Getty/Michael Kovac / Stringer.
Summary

It was all going so well.

No, you’re not having déjà vu, another social network is falling apart.

This time it’s not Twitter – whose decline into disaster we’ve been charting – but Snap (the company behind Snapchat).

While Snap has exploded onto the scene in 2011, powered by the millions of millennials, today its magic is running out.

Yesterday it reported user growth of just 4% over the last three months (or 7m new Snapchat users), that’s down from 17% this time last year.

At the same time Snap’s losses are widening, far outstripping the social network’s revenue growth, sending its shares tanking 14% just six months after the company floated on the stock market.

Even Snap’s wearable Spectacles are losing their sex appeal, sales are believed to have fallen to under 41,500, down from 64,000 earlier this year.

And now would-be fans of Snapchat are turning away too.

As Solberg Audunsson, co-founder of influencer platform Takumi, which specialises in sponsored product placement on social networks, told The Memo:

“The short answer is that we see Instagram as a 700m market that is growing, and Snapchat as a 200m market that is shrinking.”

Remind you of anyone?

Snapchat's Spectacles.

 

Snap, meet Twitter

Yes, Twitter went through exactly the same process in 2013.

After listing its shares on the stock market the social network almost fell off the rails.

Its user growth stagnated while it failed to tackle bullying and abuse that ran rampant on the network, scaring away would-be advertisers.

Its high-flying CEO quit, leaving founder Jack Dorsey to try and pick up the pieces.

But while Twitter and Snap share many similarities, they’re different in one key way.

While Twitter’s downfall was largely self-inflicted, Snapchat’s was orchestrated by Mark Zuckerberg.

Spurned by Snap founder Evan Spiegel’s very public takedown of Zuck’s $3bn offer to buy his company – which he told Forbes magazine wasn’t “very interesting” – Zuckerberg quietly plotted his revenge.

Crushing Snapchat

Over the last 14 months Facebook has shamelessly ripped off nearly every feature of Snapchat, through its apps like Messenger, Instagram and WhatsApp.

Snapchat Stories became Instagram Stories, Snapchat’s face-altering ‘Lenses’ were added to Facebook, and even disappearing messages arrived on Instagram.

Earlier this year we asked “Can Snap cash in before Facebook gobbles up all the millennials?

The answer is yes, Snap successfully sold its shares on the stock market.

But now Zuckerberg is here to claim his revenge.