Today, technology is advancing so fast that it is essential that the major players stay current, otherwise they will be overtaken by one of the startups. One of the newer companies is Snapchat and people ask themselves the following question:
“Is Snapchat the new Facebook?”
Snapchat was started in 2011 by Evan Spiegel, Bobby Murphy, and Reggie Brown at Stanford University. The original idea was to create an application that would allow users to share images that were short-lived and automatically deleted. Because photos are short in duration, they would normally be fun photos. As is often the case with new technologies, the uses are very often expanded from the original idea. Snapchat became a mix of private messages and public content that includes live events like sports and music.
The company grew rapidly, and by November 2012, users had shared more than 1 billion photos and 20 million photos were shared every day. New facilities continued to be added, such as the ability to send video snapshots in addition to photos in December 2012.
According to Snapchat’s own statistics, in May 2015 users were sending 2 billion videos per day, which grew to 6 billion in November. By 2016, daily video views had risen to 10 billion. In May 2016, the company raised $ 1.81 billion in capital, demonstrating the strong financial interest in the company.
In September 2016, Snapchat Inc. was rebranded as Snap Inc, and the company launched Spectacles, which is a pair of smart glasses with a built-in camera that can record 10 seconds of video at a time. These glasses are sold in pop-up stores across the country.
Recent performance
In the last quarter of 2016, Snapchat announced that it has 158 million daily active users. Sales are generated primarily through advertising and increased from $ 58.7 million in 2015 to $ 404.5 million in 2016. However, losses increased from $ 306.6 million in 2015 to $ 514.6 million in 2016. On average, Snapchat earns $ 1.05 from each user per quarter. That compares to the $ 4.83 that Facebook earns. However, Facebook is well established and Snapchat is less than 6 years old. Revenues tend to be seasonal, with the most dollars spent on advertising in the last quarter of the year.
Demography
In 2014, researchers from the University of Washington and Seattle Pacific designed a group of user surveys to try to understand why the app was being used. Rather, it was used for applications such as “stupid faces”, and 59.8% of respondents reported that this use was the main reason for using Snapchat. As a result, the study suggests that the success is not due to its security properties, but rather because users found the app fun to use.
Monetization
Snapchat’s first paid ad was shown to users in October 2014, which was a trailer for the horror movie Ouija. Like all businesses, it recognizes the need for an income stream. In 2015, McDonald’s paid for a branded geofilter that covered its restaurant locations in the United States. The initiatives continued to generate revenue, one of which involved the National Football League to present live stories of selected games. In 2016, the company announced an agreement with NBC Olympics to allow stories from the 2016 Summer Olympics to be featured on Snapchat in the US The stories covered a combination of images from NBC, athletes, and attendees.
New York listing
Snap Inc., the parent company, has revealed plans to go public in what is expected to be the largest US technology listing in recent years. This has surprised many people as the losses have increased every year.