Snapchat's new design is driving users away in bunches

Lloyd Doyle
August 8, 2018

With self-service ads, Snap has been able to grow revenue in regions such as Australia and the Middle East, where direct sales efforts are more limited and advertisers have few other options to market to its mainly 18-34-year-old users.

Snap Inc. reported on Tuesday that its number of daily active users fell by 2% to about 188 million, marking the first time the company has lost daily users since the company was founded in 2011. The redesign was widely considered a bust, with famous and everyday users complaining about the confusion caused by the new placement of some of their favorite features.

The company behind Snapchat posted revenue of $262.3 million in the period, also topping the estimate of $247.2 million.

That's despite a drop in active users-a first for the company.

Snap Inc CEO Evan Spiegel said on a call with investors, "It has been approximately six months since we broadly rolled out the redesign of our application, and we have been working hard to iterate and improve Snapchat based on the feedback from our community".

There was a small silver lining, too.

The drop in daily active users is an unfortunate turn for the company, as it struggled with a tepid reaction to its app redesign late a year ago as well as continuing problems with its Android app.

Snapchat has experienced a string of declines after lackluster earnings reports since going public in March 2017.

Snap's stock was all over the map following its earnings.

Though the company said user counts may fall even further, it didn't provide insights about the recently released Spectacles (which CNET liked but didn't love).

Snapchat responded with a few design tweaks to appease users, such as making it easier to find Stories.

"Snap has a major app redesign in process which remains one of the linchpins for future success and monetization, although it has encountered clear speed bumps on this front", said Daniel Ives, chief strategy officer at GBH Insights.

Its results come at the tail end of a brutal earnings season for Silicon Valley, which saw huge chunks torn off the valuations of Twitter and Facebook following disappointing numbers.

Saudi Arabia's Prince Alwaleed bin Talal announced soon after the results that he had finalized a $250 million deal in May to buy a 2.3 percent stake.

Other reports by Iphone Fresh

Discuss This Article