Facebook’s FBrivalry with Snap’s SNAPSnapchat has intensified with the social media giant working on monetizing Stories — a slideshow of photos and videos that vanishes after 24 hours — on its main platform.
Per TechCrunch, Facebook Stories hit 150 million daily active users (DAUs) so far in May. Facebook is testing video ads of 5 to 15 seconds duration in the United States, Mexico and Brazil.
However, this is definitely not good news for Snap, which has been struggling hard to keep the interest of users and advertisers alive. Notably, the redesign of the Snapchat app, which garnered significant negative response, had an adverse impact on the company’s ad business, which remains the primary contributor.
This is mainly due to the fact that Snap operates in an environment where competition for ad revenues is highly intense. Apart from Facebook, advertisers are more likely to opt for other platforms such as Alphabet GOOGLand Twitter TWTRas the total addressable market (TAM) of these companies is much bigger than Snapchat.
Besides, Facebook’s strategy of mimicking Snapchat’s feature to boost user growth and engagement levels has been successful with the social media giant making them more popular than Snapchat.
This has led to polarization of investor sentiment on the stock, which is evident from its year-to-date performance. Notably, shares of Snap have lost 27.7%, while Twitter, Facebook and Alphabet gained 34.7%, 4.1% and 2.2%, respectively in the year-to-date period.