The decline of Snapchat is confirmed. For the second consecutive quarter, the number of followers of the e-mail application has decreased between July and September. And the leaders of american society have warned that this trend would continue by the end of the year.
In the second quarter, Snapchat had an average of 186 million active users per day, or two million less than in the first quarter.
Its parent company, Snap, explains this poor performance by the technical problems of its Android application. An old problem that still has not been resolved. “We’re developing a new version “, promises to Evan Spiegel, the owner of the company. In the spring, the manager had put in before a overhaul criticized, and since largely abandoned, the service.
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Problems of growth of Snapchat, however, are more profound. The application especially suffers from the competition of Instagram, the platform photos and videos owned by Facebook. In August 2016, it had copied the format of the “stories” that allows you to share photos and videos that disappear at the end of twenty-four hours. Depending on the broker Piper Jaffray, Instagram has since become the favorite of american teenagers, the target audience of Snapchat. The “stories” have also been added on Facebook. And they are even more important in the new version of Messenger, the messaging application of the social network.
To stand out, Snapchat update on the video programmes produced by media partners, but also internally. At the beginning of October, the company has presented twelve series and documentaries filmed in vertical format. These programs, which typically last less than five minutes, are interrupted by two or three advertisements of six seconds. “Extra space for ads premium “, welcomes Mr. Spiegel.
“An internal goal is not a prediction ”
Despite its difficulties, “the platform may retain a user base high enough to maintain its positions on the advertising market,” said Brian Wieser, analyst at Pivotal Research. In fact, Snap has recorded, in the second quarter, an increase of 43 % of its revenue, to $ 297 million (261 million euros), exceeding its own forecasts and those of analysts. And its losses have been divided by three since the beginning of the year. “The road to profitability seems clear,” said Mr. Wieser.
During a conference call, chief financial officer of Snap, however, has showered the hopes of the investors. He did not want to confirm the forecast of profitability, on an adjusted basis, which excludes certain expenses, to 2019. A goal that Mr. Spiegel has recently set in a message to employees. “Keep in mind that an internal goal is not a prediction,” said Tim Stone.
Warning well received by Wall Street. In exchange after Exchange, the action of Snap fell, Thursday, October 25, more than 10 %. It should as well touch this Friday to a new historic low. From march 2017, its value has shrunk by 75 %.
