Remember the blaze of hype that enveloped Snap when it went public in March?
If you don’t, you’re quite likely not the only one. On Wednesday, Snap, the parent company of the messaging app Snapchat, returned to reality in a big way when it announced its first earnings report as a public company.
The results were — how shall we put it? — not good.
Snap disclosed a whopping $2.2 billion loss. Its revenue numbers missed Wall Street expectations. User growth slowed. Spending rose. And investors reacted by dumping Snap’s stock in after-hours trading, writes Katie Benner, a technology reporter for The New York Times.
Snap faces an uphill battle in the era of Facebook, which has made the giant size of its network a prime advantage. With Facebook setting the benchmark, Snap looks tiny. Worse, Snap’s emphasis on the intimacy of its social network appears foolhardy.
Evan Spiegel, Snap’s chief executive, has said it is a matter of educating people to understand that big is not always better in social networking. For now, it seems that there is a lot more educating to be done.