Stock crashes
Snapchat’s advertising business is ailing
The photo app Snapchat has continued to attract new users – but the advertising business has not taken off. The developer Snap internally expects a drop in revenue of between two and ten percent for the current quarter.
Published: 19 minutes ago
The developer Snap internally expects a drop in revenue for the current quarter. (archive image)
Snap has also recently slipped deep into the red. The bottom line is that it lost about $288.5 million in the last quarter, compared to a profit of $22.5 million a year earlier. Sales remained at $1.3 billion, Snap announced after the US market closed on Tuesday. The stock fell about 14 percent in after-hours trading.
The number of Snapchat users rose to 375 million from 363 million three months earlier.
Founder and boss Evan Spiegel referred to the weakening economy, which is slowing down the online advertising market. Snapchat continues to plague Apple’s iPhone privacy policies. App developers like Snap have to ask users for permission if they want to track their activity across different apps and websites to personalize ads. Many users reject this, which has made ad platforms less efficient, including Snapchat and Facebook.
(SDA)