Teens ghost Snap as redesign causes crackles and fails to pop

8 Aug 2018136 Views

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Snapchat lost 3m users in the last three months.

An unpopular redesign, plummeting daily user numbers and news that its source code has been leaked onto GitHub all signal the end of a second quarter that otherwise should have been golden for Snapchat owner Snap.

In its second quarter 2018 earnings, it emerged that Snapchat’s daily active user numbers shrank 1.5pc to 188m, down from 191m users in the first quarter.

Otherwise, the fundamentals look good with revenues up 44pc to $262m compared with $182m a year earlier.

Snap’s net losses decreased by 20pc to $353m. Average revenue per user increased 34pc to $1.40 and the company launched new services such as group video chat which enables users to video chat with 16 friends at once.

But most of the attention from analysts and media appears to be centring on the decline in daily active users since the first quarter, marking the first-ever quarter of negative user growth in Snapchat’s history.

A design for strife

Much of the blame for this is being placed on a controversial redesign that ignited the ire of users immediately. It even led to a Change.org petition to reverse the changes, which gained more than 1m signatures.

Snap later made updates to roll back some of the unpopular changes but the damage was done among the crucial teen audience. However, the changes appear to have prompted increased activity among users aged 35 and older.

“One of the most important things about the redesign is that we’re surfacing the right content to the right people as quickly as possible,” CEO Evan Spiegel said in an earnings call.

Conventional wisdom would suggest that alienating teens for older users is hardly cutting edge, but there you have it.

Snapchat has even picked up $250m in new investment from the Saudi royal family, valuing it at $10.8bn – although this is a steep discount compared with Snap’s $17bn market capitalisation.

The investment was revealed by Saudi prince Al-Waleed Talal who tweeted that he invested $250m for a 2.3pc stake.

In related news, it emerged that the company recently instigated the taking down of its source code, which appeared on GitHub in May, under the Digital Millennium Copyright Act (DMCA).

“An iOS update in May exposed a small amount of our source code and we were able to identify the mistake and rectify it immediately,” the company said in a statement to tech site Motherboard. “We discovered that some of this code had been posted online and it has been subsequently removed. This did not compromise our application and had no impact on our community.”

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com