One reason is that older folk have, for years, been using Instagram, which is owned by Facebook (which they’ve also used since college or high school). Facebook has been systematically copying Snapchat’s most popular features, including Stories, ephemeral 24-hour photo montages of a user’s activity. It’s no surprise: Facebook has enormous wealth and leverage, including 2 billion users of its core service and over a billion each for its messaging apps, Messenger and WhatsApp. Instagram boasted some 30 million users when Facebook acquired the company in 2012, and that figure has swelled to 800 million in the five years since. Snapchat is stuck around 170 million users.
Snap, the company that makes Snapchat, has shed more than half its value since peaking just after going public in March of this year. Its current market cap, about $16 billion, is still more than the $3 billion Facebook offered to acquire the company. And Google had reportedly bid up to $30 billion for the company in advance of the IPO. Although Snap denied the rumor, if true it’s a figure the company might regret having spurned to go it alone.
Snap’s attempts to shake its doldrums have been mixed. A year ago, the company introduced a $130 pair of glasses called Snap Spectacles, which took photos for its app. Initial demand was high, but it soon collapsed. Less than half of buyers were still using the gadget a month after purchase. Snap wrote down almost $40 million dollars in excess inventory.
It also paid around $100 million to acquire a Canadian company called Bitstrips, integrating its Bitmoji product, a stylized avatar, into the Snapchat service (it can also be used as a stand-alone stickers in other messaging and social-media apps). Bitmoji gave every Snapchat user a similar but strikingly accurate cartoon image of themselves. And it offered a new platform for advertising, via sponsored avatars—an approach that the company had previously explored with ad-supported photo filters and lenses.
Bitmoji also gave Snapchat a way to represent its users in a standard, physical way. It released Snap Map in June, which allows friends to see one another’s activity on a map.
None of these innovations really helped turn around Snap’s decline. Though still popular among its core audience, its stock dropped 20 percent in November, after the company missed revenue, profit, and user-growth expectations. Its user base had grown by only 3 percent since the previous quarter.
* * *
This week, Snap CEO Evan Spiegel announced a redesign of Snapchat. The app is notoriously unintuitive for the unfamiliar, and the redesign, which Spiegel promised in the wake of dismal Q3 results, hopes to boost adoption by making it easier for new users.
The announcement came in the form of a short video of Spiegel explaining the “new and improved” Snapchat. The video is disorienting—a video of a video shoot, really, a jaunty yellow backdrop displayed as a prop instead, the camera cutting between views of Spiegel and those of a film crew filming Spiegel. “Look at us working hard,” the video’s subtext telegraphs.