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In the News

Snap burns money as competition intensifies

Geoff Riley

14th August 2017

Snapchat now has 173 million daily active users but the business is burning money at a fierce rate as it faces increasing competition from the likes of Facebook's Instagram and WhatsApp.

Here are the big numbers: Quarterly revenues over the last year have more than doubled to $181.7 million, but losses nearly quadrupled to $443 million over the same period.

Snap's focus remains on developed country markets where the potential for lifting advertising revenue per user remains fairly strong. But there are many who doubt whether the business will ever make a profit especially as rival firms successfully mimic some of Snap's most successful features. For the moment, Founder and CEO Evan Spiegel remains defiant and bullish about improving Snap's critical financials.

Rory Cellan-Jones at the BBC argues here that the age of creative destruction in digital sectors may be coming to an end.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

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