The king of social media is still Facebook with its 2 billion user base and Snapchat need growth

There is not doubt that the king of social media is still Facebook. But Facebook is not only Facebook. In addition, you have Instagram, WhatsApp and Messenger which means that Facebook accounts for four of world`s largest social media and messaging services.

But what about Snapchat? The stock has declined since it went public and the value of the company is only half of what it was from start. Not only that; Snapchat is far away from its competitors when it comes to MAU`s.

Snapchat has problems. The company is not growing and that will in the long run affect the workers. Some will be frustrated and quit, and that`s the fact right now. The company is laying off employees in one of its most important divisions.

Snap lost high-level executives last year and one of them was Tom Conrad who came from Pandora to join Snap back in March 2016 where he was the music-streaming company`s chief technology officer.

Engineering chief Tim Sehn was resigning the same day that Snap reported dismal third-quarter earnings results. The stock fell more than 5% in one single day when the company announced that their vice president of product is leaving Snap.

On top of that, their competitor Twitter announced they were working on a Snapchat-like video sharing app to compete with Snapchat. Having competitors like Twitter and Facebook with the same core business in a market like it is today is heavy.

So far in their short-lived life, they have faced a lot of challenges. Having executives leaving the company in early stage is one thing, but their redesign has also been negative, and the feedback from their own customers have so far been very negative.

Snaps redesign has made it harder for people to view Stories and that means fewer Snap Ad impressions. Snapchat has «only» 178 million MAUs and thats far away from the social media king. In comparison; Twitter have 330 million MAUs and Pinterest have 200 million.

Snap developed a self-serve platform for buying Snap Ads and that resulted in lower average ad prices. Marketers can now bid what they see as fair value for Snap Ads. At the time when Snap announced the app redesign, Spiegel said, «There is a strong likelihood that the redesign of our application will be disruptive to our business in the short-term.»

Facebook`s giant user base of more than 2 billion enables it to fend off any competition. They continue to expand in North America, Europe and Asia and the rest of the world, so future are still looking bright.

Facebook is set to report fourth-quarter 2017 results on January 31, 2018, and the strength in online and mobile advertising revenues, in addition to expanding Instagram user base will drive top-line and earnings growth.

Snap is expected to report earnings on February 6, 2018 after market close. Earnings forecast for fiscal quarter ending December 2017 is $-0,33.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.


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