Snapchat's not-growing pains are a boom for Instagram

phys.org | 8/10/2017 | Staff
joseph76 (Posted by) Level 3
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Facebook once failed to buy Snapchat; ever since, it's tried to copy it, mostly without success.

Until now. Facebook's Instagram Stories, a clear Snapchat clone, has more daily users than Snapchat itself—and parent company Snap Inc. should be very worried.

Snap - Stock - Price - Percent - Offering

Snap's stock price has fallen 45 percent since its initial public offering in May. While the doom doesn't spell imminent death, it's a sign that Snapchat could be relegated to the sidelines as a niche app for young people—or worse, a passing fad—rather than a major competitor for digital ad dollars like Facebook and yes, even Twitter.

An analyst for Morgan Stanley, the lead underwriter for Snap's IPO, recently cut his rating of the company's stock, citing competition from Instagram and worries that Snap's advertising offerings aren't evolving or improving. The analyst, Brian Nowak, said the company needs to do more so that advertisers don't see it as a mere experiment, but a serious player.

Instagram - Stories - People - Share - Videos

Instagram recently disclosed that Stories, which lets people share videos and snapshots in a continuous 24-hour loop, has amassed 250 million daily users in the year since it launched.

Snapchat, in comparison, had 166 million daily users in the first quarter—and that's all of Snapchat, not just its version of Stories. Instagram in its entirety, meanwhile, had more than 400 million daily users as of February, the last official count.

Snap - Results - Market - Thursday

Snap was scheduled to disclose second-quarter financial results after the market closes on Thursday.

"Facebook has proven themselves to be a fierce competitor ," Gartner analyst Brian Blau said. Facebook, he added, understands how to get more and more people to sign up and keep using its services.

Snap - CEO - Evan - Spiegel - Company

Snap CEO Evan Spiegel has long defended the company's decision not to make user growth its primary mission. He doesn't even like calling Snapchat a social network; he insists it's a camera company.

"There's a lot...
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