http://www.economist.com/news/business/21716070-app-company-has-pioneered-distinctive-vision-internet-snaps-ipo-will-be-largest
Snapchat has become one of the most daily used social media apps in the west since 2013. 41% of people age 18-24 use the app daily and the estimated value of the company is $20-25 billion. Snap, the parent company of Snapchat is going public in March and is expected to be one of the biggest IPO's in years.
With such a diluted market of social media companies, investors will look to see if Snap will be able to survive and not be bought out by larger companies like Facebook. However Snap is saying that they are a camera company and not a communications company. They have already came out with a new product called spectacles ($130) where someone can put them like glasses and a camera will record from the person's point of view.
There are some negatives to the IPO, like the competition that Snapchat will go up against. It will compete directly with YouTube (owned by Google) for ad dollars and Instagram just came out with 'stories' as well, which when that dropped the usage of Snapchat stories declined.
If Snap wants to survive with these giants they might need to make moves of their own so they aren't bought out. People forget that Facebook offered to buy Snapchat for $3 billion in 2013.
6 comments:
I think it is very interesting that Snap is launching as a camera company. Is this Snap setting the stage to roll out more camera-related products like Spectacles in the future? I can't help but think of the relative failure that was "Google Glass" and I wonder how Spectacles will distinguish themselves. It is hard to predict what will catch on and what won't. I actually read this article a few days ago and was struck by the observation of the CEO, Evan Spiegel; "he is secretive and controls information tightly. No one but Mr. Spiegel—not even the board and other top executives—knows all the important details of the firm’s strategy and future plans." This relates to what we have been talking about in class about the use of knowledge in society; it seems like Mr. Spiegel has centralized information very strictly in his firm, in order to protect Snap and keep anything from leaking to competitors. I think we can definitely expect some new innovation out of Snap Inc., but whether their new products and services will prove to be successful is another story.
I feel that Snapchat's product is unique enough and has enough of a following that it will continue to grow. Features such as geotags make Snapchat interesting, and make it become a part of users' daily lives. I can't think of a single one of my friends that doesn't use Snapchat, and it seems to be just as popular to younger generations. I would think that its popularity will only continue to grow as younger people grow up and begin to get smartphones.
Snapchat's product was unique enough. As the article discusses, Instagram creating a story option has greatly hurt snapchat's success. Mr. Spiegel believes taking data from users as "creepy" so until they begin to exploit their users for profit Snapchat will be holding back in its potential success.
Geofilters, and personalized tags are an avenue for profit for the firm, but their prices are too high for the average consumer and this limit the purchaser to only large firms.
The point Rachel made about comparing "Spectacles" to "Google Glass" is an interesting one. I do think Spectacles are useful if the user is able to instantaneously take a snap without the user having to take out their phone. The Spectacles may seem a bit cumbersome to wear though, like Google Glass, and I find that people would find it inconvenient if they are wearing glasses only for that purpose.
i agree with brooks that Snap has a great following and will continue to grow. i think the spectacles will be interesting to see if people buy the product, it is a very interesting idea but it seems like there will have to be a great deal of informing the consumer on how to use it. i think snap chat needs to make a way that companies can use the app for advertising reasons like they do on Facebook and Instagram.
It has been interesting to follow snapchats growth over the years as they have become one of the most popular social media platforms to date. What makes the app so great is the small number of ads it uses compared to other social media sites. It will also be interesting to see how the company can compete with the big names such as YouTube, who has been established for a much longer time. The introduction of the snapchat spectacles was huge for the company and it will be cool to see if the create any other products in the near future.
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