Before Snap’s IPO in March, it looked like the company could validate CEO Evan Spiegel’s vision as the next evolution in how people communicate—ephemeral, visual, instantaneous, and intimate.
Tuesday, Spiegel said the vision needs some adjustment. He jolted investors with news that the company is redesigning its signature Snapchat app and acknowledged, “[W]e don’t yet know how the behavior of our community will change” as a result.
The surprise announcement continued what has been a rough yearfor the one-time darling. Rival Facebook continues to mimic some of its most popular features. Snap reported disappointing third-quarter financial results Tuesday, with fewer users and less revenue than analysts had expected. It also took a $40 million financial hit for millions of unsold pairs of its Spectacles augmented-reality glasses.
Details on the redesigned app were scant. Spiegel told analysts the goal is to make it easier to use, particularly for people using Android phones, those older than 34, and people outside the US and Western Europe. Not long ago, the app’s inscrutability to many adults was viewed as an asset. Spiegel said the new plan is to surface more of “the vast quantity of content on our platform that goes undiscovered or unseen every day,” in a more personalized way.
The change is a risk, he said, adding, “We’re willing to take that risk for what we believe are substantial long-term benefits to our business.” He pointed back to Snap’s introduction of Stories in 2013. He said the feature had few users in its…Read More