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Why Snapchat is Loosing Money

One of the most popular applications among the youngsters – Snapchat has started struggling after going public since March 2, 2017.

Snapchat was launched in 2011 as an instant photo sharing application by Evan Spiegel, Bobby Murphy and Reggie Brown.

As per June 20, 2017, there were 166 million daily active users of Snapchat according to CNBC which is basically very less compare to the biggest competitor Instagram.

5 Biggest Reasons Why Snapchat is Losing Users

1. CEO STATEMENT

After going public, the ex-employee of the company revealed that according to Evan Spiegel “The app is only for rich people, I don’t want to expand into poor countries like India and Spain.” And then we all know what happened!!

As a CEO and founder of multi-million dollar company, Evan apologized. But the game was changed!

 

Also Read: Why Facebook & Google are Not Allowed in China?

The impact of such a statement, the Snapchat stock price started getting lower and lower.  Till this date 16 December 2017, Snap Inc. is failed to cross $24 (the open price of Snap Inc.)

2. Instagram Challenge

Since Snapchat rejected Facebook’s $3 billion offer, Facebook started copying all the special features that were was making Snapchat better than Instagram.

According to Forbes,  Evan Spegiel’s response to Mark Zuckerberg like”We’re going to crush you”.

 

Also Read: 3 Best Methods to Make Money From Instagram

Facebook has already a large number of user base. Instagram is totally changed in just 2 years. Instagram increased its user base and Snapchat could not do anything.

Mark Zuckerberg is exactly following this quote “Good artists copy, Great artists steal“. Facebook is doing advertisements on stories and making far more money than Snapchat.

3. Google Offer Rejection

In early 2016, Google offered to buy Snapchat for $30 billion. This offer was 10 times more than Facebook’s offer.

4. Design And Structure

It is quite complicated to understand Snapchat for new users. Because the design of the application is inappropriate.

Comparing with Facebook and Instagram, it seems unique but not better in the user interface. On November 2017, Evan Speigel announced about redesigning the application.

5. Application Size

Application size of Snapchat is very large in comparison to Instagram on both Android and iOS platforms.

Either they can compress the size or they can create another application called “Snapchat Lite” with less effective features.

That’s what Facebook has done with Facebook Lite for the users who are using the low-speed internet connection and have not enough space for the official Facebook app.

6. IPO Failure

After the launch of IPO(Initial Public Offering), the stock price of Snap Inc. started decreasing. And the company started losing market capitalization.


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Thank You 

Anuj Vohra

Hi , I am Anuj Vohra. Founder of Itsfacile.com & Saral Investment.

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