The world’s most popular snapshot disappearing app, Snapchat, is now going back to the drawing board. Snap. Inc will be redesigning in attempt to reach a wider audience after Wall Street showed the app slowing down in numbers of user growth for this quarter.
In March of this year, Snapchat was the hottest tech stock that was seen in years. This recent revenue report looks to be below what Wall Street expected. Snapchat is now scrambling to compete with Facebook inc., Instagram.
Snapchat’s shares have fallen about 20 percent in after-hours trading, which has shown to disappoint investors. Currently, a share for Snap Inc. (SNAP.N), is at $12.57, when its debut was at $17 a share.
In light of the stock downfalls, Snapchat seems to have big plans for redesigning the app completely. The big redesign will be an easier to use Android version of the app, according to an earning letter sent to Snap Inc. employees. From what it sounds like, this is not just some minor tweaks. In the earning letter that was sent, 27-year-old Snapchat CEO, Evan Spiegel, talks on a complete redesign of the interface for all users.
One thing that we have heard over the years is that Snapchat is difficult to understand or hard to use, and our team has been working on responding to this feedback. As a result, we are currently redesigning our application to make it easier to use. There is a strong likelihood that the redesign of our application will be disruptive to our business in the short term, and we don’t yet know how the behavior of our community will change when they begin to use our updated application. We’re willing to take that risk for what we believe are substantial long term benefits to our business.
The rethinking of the app can definitely help the company get their numbers up in users. Spiegel does warn that the rebuild of the app will possibly lose its cool factor. Since the app is getting a re-do treatment, users who are familiar with the app top to bottom possibly will have to relearn all of the new features. The release date of this new app is not specified in the earnings letter.
Snapchat isn’t the only social media platform that is seeking out a whole new look, Twitter recently introduced the use of 280 characters a tweet, doubling the classic length of the 140 characters.
When asked on an analyst call of what the new app will look like, Spiegel said that the company has been keeping tabs on what their competitors like Facebook and Twitter have been rolling out, and will be looking at making their platform more personable. The analyst on the call, Rich Greenfield of BTIG, stated, ““It seems like a significant amount of change in a short period of time.” Greenfield then asked what inspired these sudden changes and Spiegel replied, “We’re just not afraid to make changes in the long-term interest of the business.”
In talking third-quarter revenue, Snapchat made $207.9 million from $128.2 million, due to rise in advertisements. Analysts on the average were expecting $236.9 million. From these numbers, Snapchat is behind on making their advertisements accessible versus Facebook and Google. Greg Portell, a consultant at A.T Kearney on the matter stated, “I think they just spent a little too much time being different.”
The new redesign of the platform shows promise for Snap Inc. With its competitors like Facebook and Instagram raking it hundreds of millions of daily users, a new redesign can freshen up the interface, help the numbers climb on Wall Street and overall bring in a bigger audience.
