Nov. 8 (UPI) — Stock shares for Snap, Inc., the company behind Snapchat, fell 16 percent Tuesday after its third-quarter earnings report shows revenue growth failed to meet expectations.
Snap expected to generate revenue of $237 million, but pulled in $208 million, while posting a net loss of $443 million, CNBC reported. The company also fell short of attaining its goal of 181.8 million daily active users, instead generating 178 million.
Adding a total of only 4.5 million new users was a major drawback for the company as it competes for digital advertising revenue against large companies like Facebook and Google‘s parent company, Alphabet.
“Taking share from the Facebook-Google advertising duopoly is virtually impossible,” James Cakmak, an analyst with Monness, Crespi, Hardt & Co, told the Wall Street Journal. “And for the third quarter in a row, Snap is showing they don’t have a silver bullet.”
Facebook has also added features to its platform that are similar to Snapchat in an effort to pull away some of its users, the New York Times reported.
Snap CEO Evan Spiegel said the company is looking for ways to make its Snapchat app more popular among the youth demographic that makes up the majority of its user base, but said, “we don’t yet know how the behavior of our community will change when they begin to use our updated application.”
