By Katie Davis T here is a growing rivalry between Snap Inc. and Facebook Inc. and for the time being it seems like Facebook is taking the lead as Snap Inc. has not been able to answer concerns about their user growth or lack thereof, but that did not stop investors from throwing their support and money at them. For now Snap Inc.’s investors are willing to accept that a product issue with its Android version is responsible for its lack luster performance in attracting new users for its Snapchat photo- sharing mobile app. Investors might be growing increasingly skeptical in Snap Inc. to draw in new users, but that did not stop them from pulling off the biggest U.S. listed technology share sale since Chinese e- commerce Alibaba Group Holding’s offering that smashed records in 2014.
Now all the focus will shift to Snap Inc.’s ability to grow their user base because of rising competition from Facebook Inc., whose Instagram app recently launched a clone of Snapchat’s popular stories disappearing-video feature.
The new Facebook Inc. app has been an instant success with users, with Instagram’s stories quickly gaining over 150 million daily active users, which is just shy of Snapchat’s 158 million which the 7-year- old company has acquired and they have been giving little details on future plans outside of pushing toward profitability in its flagship Snapchat app to perk investors interest.
How quickly Snap Inc. can add new users and how engaged those users will be with Snapchat is what investors want to know and what will be needed to keep this stock moving in the right direction.
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MARCH 2017 • SPOTLIGHT ON BUSINESS MAGAZINE
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