Snapchat

• Social Media (Global Market)
• Social networks (Russian market)

Snapchat is a messenger running on iOS and Android that allows users to exchange messages with attached photos and videos. The sender of the message himself determines the time in a few seconds during which the recipient sees the message, after which it is removed from the smartphone, while remaining on the Snapchat server. The application supports various filters and video processing methods.

Business in Russia

2022: Fine for refusing to store data of Russians in the Russian Federation

On July 28, 2022, the judge of the world judicial district No. 422 of the Tagansky district of Moscow fined the American company Snap 1 million rubles for refusing to localize the personal data of Russians. The owner of the Snapchat messenger was found guilty under Part 8 of Art. 13.11 of the Administrative Code of the Russian Federation (failure by the operator when collecting personal data to ensure the recording, systematization, accumulation, storage of personal data of citizens of the Russian Federation).

On July 6, 2022, Roskomnadzor reported that a protocol was drawn up against Snapchat for refusing to localize the data of Russian users in Russia. Then it was reported that the company faces a fine of up to 6 million rubles.

Court fines Snapchat owner

In early March 2022, the Snapchat administration announced that the company would no longer show ads in Russia, Belarus and Ukraine. In addition, Snap has stopped all advertising sales in Russia and Belarus. The developers said they would leave the application working in these countries, since it remains an important communication tool, but will comply with "all sanctions directed against Russian legal entities and individuals." At the same time, the company emphasized that it does not have physical offices in Russia and does not accept income from Russian government organizations.

According to the legislation in force by July 2022, Russian and foreign companies must store personal information of Russians only on the territory of the Russian Federation. The localization requirement applies to foreign companies that do not have a physical presence in Russia if they operate in the country. Earlier, for refusing to store the data of Russian users in the country, they fined, Zoom,, and Apple Twitch Pinterest Airbnb other companies. Similar fines also threaten and. Whatsapp A court in Moscow Spotify^[1]

2017: Roskomnadzor entered Snapchat in the register of information dissemination organizers

On August 10, 2017, Roskomnadzor entered Snap Inc., the owner of the Snapchat mobile application, into the register of information dissemination organizers. The company was entered into the register after, in response to a request from Roskomnadzor, it provided the necessary ^[2].

Not much is heard about Snapchat in Russia, but the application definitely has its own audience: according to App Annie, since the beginning of spring 2016, the application has almost constantly been in the top 30 of all applications in the Russian App Store, from time to time rising to the top ten. As of February 3, 2017, Snapchat ranked 12th in the App Store in Russia.

History

2024: Dismissal of 10% of employees

On February 5, 2024, the American company Snap Inc., which operates the Snapchat service for exchanging messages with attached photo and video materials, announced a reorganization. As part of this process, approximately 10% of employees will be laid off.

It is said that restructuring is necessary to compensate for the negative consequences that are due to the current macroeconomic situation. This, in particular, is a decline in the online advertising market, as well as changes in investor sentiment.

Pexels

Snap had about 5,300 employees in early 2023. Earlier, the company conducted several rounds of staff reductions due to the difficult financial situation. In 2022, Snap cut 20% of employees, and in 2023, the staff decreased by 3%. Thus, as part of the reorganization, approximately 500 employees will be laid off.

Due to the current macroeconomic situation, Snap faced difficulties in the advertising market. The company has tried to move beyond its core social media business, but augmented reality glasses on display have never been widely adopted, and other hardware projects such as the selfie drone have been phased out shortly after launch.

As of early February 2024, Snap does not specify which units will be reduced. The company said the layoffs are designed to "best prepare the business for the implementation of priorities and guarantee the possibility of growth in the foreseeable future." Snap expects to spend up to $75 million on severance pay and other reorganization-related costs. The company hopes to increase the number of daily users by about 17%, raise ad revenue by 20% and double the number of Snapchat Plus subscribers from the current 7 million.^[3]

2022

Reduction of 20% of the state due to the crisis in the United States

Snap, which owns the Snapchat service, is cutting roughly 20% of the state, which has a total population of more than 6,400. As a result of the personnel purge, which starts on August 31, 2022, more than 1.2 thousand people will lose their jobs.

The layoffs in Snap were reported by The Verge portal, citing knowledgeable sources. Earlier, rumors about the upcoming cuts have already appeared on the pages of the publication, but now specific information is provided.

Snap Office

In particular, it is noted that the team that cooperates with third-party developers of gadgets and games inside Snapchat will suffer the most from layoffs. The Zenly service purchased in 2017 for the exchange of location information will also fall under a strong reduction. In addition, the personnel purge will affect Snap's hardware division, which is responsible for developing devices such as Spectacles AR headsets and Pixy selfie drones.

Data as of 2022

The advertising sales department will not avoid restructuring either. By, to data Reuters two of his top managers - vice president of advertising sales Peter Naylor and Snap chief business officer Jeremy Gorman - are moving to a streaming service, Netflix where they will lead a similar direction.

Snap's press service declined to comment on The Verge's information.

Meanwhile, Reuters notes that tech companies, cryptocurrency exchanges and financial firms are cutting jobs and slowing hiring amid weakening growth in the global economy, which has been plagued by rising interest rates, high inflation and rising energy prices. In the United States, the situation is aggravated by the difficulties that accompany the exit from the pandemic, and fears of a recession.

As for Snap, news of layoffs at the company hardly came as a surprise to anyone, given its financial indicators. Snap has only made a profit once since it went public in 2017, according to The Verge. The company completed the second quarter of 2022 with a net loss of $422 million and a slowdown in revenue growth.^[4]

Payment of $35 million for storing users' biometrics without their consent

On August 23, 2022, it became known that the state of Illinois entered into an agreement with Snapchat in the amount of $35 million in a class action lawsuit related to the illegal collection of data from users of the service.

The lawsuit alleges Snapchat's filters violated the state's Biometric Information Privacy Act (BIPA) by collecting and storing biometric data without user consent. Illinois has some of the strictest laws when it comes to companies collecting residents' biometric data, including fingerprints, iris and retinal scans, and facial scans. State law requires companies to tell people in writing why their biometric data is being collected and how long it will be stored, and prohibits the sale and transfer of that data.

Snapchat will pay $35 million for storing users' biometrics

Residents of Illinois who used app filters between November 17, 2015 and the time the dispute was settled can claim a stake in the amount of $58 to $117, according to the Chicago Tribune. The settlement still needs final approval, but users who believe they may be eligible have until September 24, 2022, to file a lawsuit.

Snapchat denies breaching BIPA, and company spokesman Pete Bugaard says Snapchat's filters "do not collect biometric data that can be used to identify a particular person or to identify a person." Bugaard added that the data used by the filters remains on the user's mobile device and is not sent to servers.

While we are confident that filters do not violate BIPA, out of an abundance of caution and in affirming our commitment to user privacy, we introduced a consent notice to Snapchat users in Illinois into the app in early 2022, Bugaard says.[5]

Active audience of 549 million people

Map of Leading Countries by Number of Users

2021

First profitable quarter in the company's history

In the fourth quarter of 2021, the Snapchat owner made the first profit in^[6] history].

Thanks to this, on the day the results were announced on February 3, 2022, Snap shares soared 54%, and Pinterest - 32%.

Purchase of web visualization company for 3D and AR products Vertebrae

On July 20, 2021, Snap announced the purchase of Vertebrae, which specializes in creating brands and managing 3D versions of its products. Vertebrae's 50-strong team after the startup's ownership change will continue to develop the platform for existing and new customers. Read more here.

Purchase of augmented reality technology developer WaveOptics

At the end of May 2021, Snap announced the purchase of a display supplier augmented reality WaveOptics whose technology is used in AR glasses. Spectacles The deal is valued at $500 million and is Snap's largest ever, highlighting the company's long-term bet that points augmented reality with will eventually become mainstream. More. here

2020: Buying a voice assistant developer for call centers Voca.ai

On November 11, 2020, Snap, which develops the Snapchat messenger, announced the purchase of Voca.ai for $70 million. Flint Capital sold its stake in the Israeli developer of voice assistants for call centers. What share was owned by a venture capital fund with Russian roots and what profit he received by leaving this startup is not specified. Read more here.

2019: Snapchat staff abused access to data to spy on users

On May 27, 2019, it became known that numerous employees of Snap, which owns the large social network Snapchat, used their access to internal tools to spy on users. This was reported by Motherboard Vice, citing former and current employees of the company.

In particular, we are talking about the SnapLion program, used to collect information about users who are interested in law enforcement agencies. According to the interlocutors of the publication, numerous employees have access to the program, including teams responsible for working with clients, security and combating bullying and spam.

According to sources, the company's employees abused the internal tool for their own purposes and gained access to various information, including saved photos and videos, location data, phone numbers and electronic addresses.

While Snap adopted stricter data access controls as of May 2019, the malicious use of internal tools, including SnapLion, was not tracked several years ago. Former employees confirmed that access to SnapLion was abused by different workers at different times and used a tool to spy on users. The publication was unable to find out how exactly which system Snapchat employees used to gain access to user information.

According to Snap representatives, the company stores a small amount of user data, but they did not deny that employees may have abused access to it.^[7]

2018

In the top 20 Internet giants in terms of the size of the Internet audience

Internet companies by audience size

Collapse of the cost of advertising in the application and loss in the 1st quarter $385.8 million

On May 21, 2018, it became known that according to an investigation by The Information, 27-year-old billionaire Evan Spiegel, one of the creators of the Snapchat messenger and the current head of Snap's parent company, is responsible for the company's failures after its IPO in the spring of 2017. So, according to The Information, sources inside the company believe.

Evan Spiegel, co-founder and CEO of Snapchat

In 2017, Evan Spiegel became the highest paid CEO among public companies in the United States: his income for 2017, according to the Bloomberg Pay Index, amounted to $504.5 million.

According to Snap representatives, the quarterly results, which were significantly lower than forecast, are mainly caused by a drop in the cost of advertising in the application: according to CNBC, this figure fell 65% compared to the same period the previous year. In particular, the company noted that the decrease in the cost of advertising was due to the introduction of automatic algorithms instead of direct sales.

At the same time, a number of publications such as CNBC and Recode did not rule out the possibility of Snap's problems due to its redesign, completed in February 2018.

According to Snap's official report on the results of operations in the first financial quarter of 2018, the company's revenue for the first quarter amounted to $230.7 million ($149.6 for the same period a year earlier) against the forecast $244.5 million.

The company's net loss was $385.8 million, or $0.17 per share, which roughly agreed with analysts' forecasts. A year earlier, the loss was $0.20 per share.

The number of active daily users of the messenger reached 191 million users (an increase of 15% compared to the first quarter of 2017), but analysts expected growth to 194 million. The average revenue per user was only $1.21 (an increase of 34% compared to the same period last year) with a forecast level of $1.27.

After the close of trading on May 1, 2018, the value of Snap shares against the background of the publication of the statements collapsed by 14% to $12.1 per share. On May 2, before the opening of trading, the fall continued and reached 18%. After the stock price, Snap fell to $10.59. The stock price is at its lowest point since the company's IPO in spring 2017.

According to The Information, Spiegel made two key mistakes that ultimately led to a fiasco with an updated application design: borrowing other people's ideas and making sole decisions without taking into account the opinions of his colleagues.

At the time of the initial placement of shares in 2017, the newspaper notes, Snap positioned Snapchat as the most popular messenger for teenagers. Spiegel's design ideas in the company were considered important for the further success of the company, although even then there were suspicions that he was borrowing them, writes The Information. Nevertheless, at the time of the IPO, he was allocated a huge compensation stake in the amount of 37 million shares of Snap.

The chronological filing change, which differentiated Snapchat from competing products, didn't sit well with users. The situation was aggravated by the separate presentation of content: from friends in one channel, from celebrities and brands in another. This, notes The Information, was another significant mistake by Spiegel, since it was to create the illusion of closeness to celebrities that Snapchat has worked hard since its inception.

As conceived by Spiegel, The Information notes, this way the application could become more understandable for older users. So, in general, it turned out, but a storm of protests arose among the youth part of users. As a result, more than a million users signed a petition demanding the return of the old design.

A slight increase in the user base and ongoing discontent led the company to decide to partially return the old Snapchat design. The latest update of the messenger returned to Snapchat, in particular, the usual chronological settings.

Snap also announces plans to increase the user base by more actively attracting users of the Android version of the application to their platform - owners of Android smartphones in the world already more than 2 billion.

Previously, the company preferred the iOS version, releasing updates for Android only in really critical cases.^[8]

2017

Features of the application functionality

As of August 2017, Snapchat allows you not only to send self-destructing photos and videos directly to friends, but also to post them on your profile - then they will be available to everyone during the day. This function is called "Stories," and everyone who could: Instagram, Facebook, VKontakte, even ICQ managed to copy it.

Self-destruction makes it possible not to worry about the "beauty" of the published pictures and their number - the user simply tells short stories that no one will remember tomorrow. At the same time, Snapchat looks like a TV. At each time, only one item of content is visible on the screen, and the user himself switches between different sources.

Q1: Net loss of $2.21 billion

The net loss of Snap, which created the Snapchat messenger, amounted to about $2.21 billion in the 1st quarter of 2017. The period covering January-March was Snap's first quarter since its initial public offering. The company's loss for the same period of the previous year amounted to $104.4 million. The increase in losses was caused by the fact that last quarter compensation in the amount of $2 billion in shares was included in them - a consequence of the IPO held in March. The loss per share was $2.31.

At the same time, Snap recorded an increase in revenue - it amounted to $149.6 million, showing an increase of 286% compared to last year's result. Nevertheless, the indicator did not meet expectations - analysts predicted the company $159 million. The average revenue from one user was $0.9, in the previous quarter this figure was $1.05. Following the release of the quarter's results, Snap shares fell 23% and are now trading at $17.67.

IPO

Having entered a market already taken over by Facebook, in just a few years Snapchat has outperformed it substantially in terms of growth and in 2017 is the only threat to its global dominance.

More than 300 million users use the mobile application every month. At the same time, the international expansion of Snapchat is just beginning:

• Advertising revenue rose 356%.
• Income in 2015 amounted to $58.7 million, and last year already $404.5 million.

• Ticker: SNAP
• Exchange: NYSE
• Date: End of February 2017
• Volume to be placed: $3 billion.
• Underwriters: most large underwriters (Morgan, Goldman, JP, Barclays, etc.).

On March 2, 2017, the creators of the Snapchat mobile communication app Evan Spiegel and Bobby Murphy became richer by $3.2 billion after IPO the shares rose 44% in the first after trading. According to reports, Reuters at the close of trading, the value of shares stopped at $24.48 - significantly higher than the value of $17 per share at the initial placement. The growth in the value of shares, therefore, amounted to 44%.

Snapchat's market value is estimated by analysts at $28.3 billion. During the trading, the shares reached a maximum value of $26.05, increasing the market value to $29.1 billion. "Despite the fact that Snapchat never made a profit, this is the largest IPO among American high-tech companies since the IPO of Alibaba Group Holding Inc in 2014," the^[9].

IPO filing

In early 2017, Snap, which owns the Snapchat mobile social network, applied for. During the IPO placement of shares, she hopes to attract 3 billion. dollars Snapchat is a very popular USA app that is little talked about Russia^[10]Moreover, the company^[11] admits that operating costs will rise in the future, and Snap may never become profitable. During the IPO, the company is expected to be valued at $20-25 billion.

Snap in its application warns that in the future the audience of the service may stop growing. And this has serious prerequisites: over the past six months, growth has seriously slowed down - only plus seven, and then at all plus four percent compared to previous quarters.

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The concept of "Camera Company" also fits that Snap began selling Spectacles glasses with a built-in camera. They allow you to send what you see in front of you to Snapchat. Users line up in long lines to buy glasses, but so far it is a very small business - and it is unclear whether it could become truly massive.

The IPO filing lists a ton of things that could harm Snap's successful future. This is competition - in addition to the obvious Instagram and, the WhatsApp company refers to its rivals, and Apple Google Twitter Asian and. Line Tencent

Snap has a twofold situation with Google: on the one hand, the corporation owns a competitive YouTube. Snapchat's infrastructure, on the other hand, is built on Google's cloud services, with the two companies signing a contract that would require Snap to spend two billion dollars on them in the next five years.

2016: Loss of $514.6 million

• 158 million users post 2.5 billion "snaps" per day (photos or short videos).
• From 2014 to 2016, according to Yahoo Finance, the daily number of active users of the service increased from 46 million to 158 million.
• The average user spends 25 - 30 minutes a day on the service. A typical user opens Snapchat 18 times a day.
• The main audience of the application is people from 18 to 34 years old. At the same time, users under the age of 25 are most active - they go to Snapchat more than twenty times a day and spend half an hour in the application.
• 10 billion video views per day
• About 50 million people watched the Olympics using Snapchat.
• 30% of millennials use Snapchat regularly.
• Posted 9,000 photos per second.
• 35% of users use Snapchat because content disappears.
• 30% use Snapchat because it does not contain their parents.

The average user logs into the application 8 times a day

• Revenue, 2016 ($ million): 404
• OpEx, 2016 ($ million): (925)
• CapEx, 2016 ($ million): (67)
• Debt, 2016 ($ million): 0
• Snapchat's 2016 losses rose 38% to $514.6 million, according to Reuters.

Nearly all of Snapchat's revenue comes from advertising, but that money isn't enough. Since 2011, when the commercial department was launched in the company, it has not been profitable for a day. At the end of 2016, Snap's accumulated deficit was $1.2 billion; net loss for 2016 - more than $500 million.

The company employs 1859 people, 600 of them came there in 2016. And Snap is not going to stop there - in the future, it is planned to expand the company both through direct hiring and through the purchase of startups.

In the fall of 2016, Snapchat developers released the first gadget associated with the service - sunglasses with a built-in camera that shoot and send photos and videos directly to the messenger.

2015: App audience - 100 million users

The timing of reaching the number of 100 million users by various applications

2013: Facebook offers to buy Snapchat for $3bn

In 2013, Snapchat offered to buy out the company for $3 billion. Mark Zuckerberg Facebook

Notes