Snap, the holding company that owns the social networking platform ‘Snapchat’ reported their Q2 2018 results yesterday and it was a mixed bag.
Starting with the somewhat good news, their revenue increased by 44% to $262 million compared to the same period last year and they managed to decrease their net loss by 20% to $353 million. They are still making losses but the losses are shrinking, which is hopeful enough.
However, the most interesting highlight was their daily active user count. Snap says that Snapchat’s daily active user account dropped by 2% to a total of 188 million, which is 3 million less than the figure reported for Q1 of 2018.
This is not good for Snapchat. Snapchat started the wave of ephemeral messaging with their Stories product where people should share snippets of their lives that expired after 24 hours and it was hugely popular. Instagram decided to clone this idea with their Stories platform and in two years, it has managed to make a significant dent to Snapchat’s growth.
Within that time, Instagram has practically doubled its active user base from 500 million to now over a billion users. Instagram Stories now boasts 400 million daily active users which is more than double Snapchat’s count. You might be even inclined to say that Instagram has won by cloning Snapchat Stories and the fact that they are losing users means that they have reached a breaking point.
There is still hope for Snapchat. They still have cool things that Instagram don’t have like better AR filters, better video chat (you can chat upto 16 people at a time), the discover platform and they sell glasses called Spectacles that tie in very well with the experience.
