The latest design overhaul from Snapchat is supposed to make the app easier to use by separating personal messages from news content, however it has been widely criticised by users of the popular social network.
Arguably the most disruptive criticism came from Kylie Jenner, one of Snapchat’s most prominent users. In a tweet posted on the 21st February, Jenner stated “sooo does anyone else not open Snapchat anymore? Or is it just me… ugh this is so sad.”
According to Bloomberg, Kylie Jenner’s comment coincided with a 6.1 percent (about $1.3 billion) drop in Snapchat’s share price.
To add to Snapchat’s dismay, a petition signed by 1.2 million disgruntled users is asking the company to disregard its redesign (introduced in November, 2017) and restore the platform to its previous state.
Snapchat has since responded to indicate that it has listened to the feedback and hopes that users will enjoy the benefits of the changes “once they settle in.”
Silicon Valley investors are less optimistic, however. In a quote published by The Guardian, Eric Schiffer, CEO of private equity firm Patriarch Organization, said “we’re watching a company explode into bits.” He went onto claim that Snapchat’s redesign was the “greatest app debacle” he’d ever seen in Silicon Valley.
The response to Snapchat’s latest update also comes in the midst of industry-wide introspection on the part of social networks around how to balance commercial content and user engagement.
In comments made before the release of its Q4 report, Facebook’s CEO Mark Zuckerberg claimed changes made to the platform, including deprioritizing viral video content, resulted in users spending 50 million less hours on Facebook every day.
He claimed this outcome is an intentional consequence of changes designed to “prioritize meaningful social interactions over passive consumption of content.”
As of January 2018, and according to a report from WeAreSocial and Hootsuite, Facebook was the largest social network in the world with 2,167 million active user accounts, followed by YouTube with 1,500 million.
Snapchat, despite announcing growth in its user base, hosts 255 million accounts and is still heavily dependent on North America for revenue. Snap Inc., Snapchat’s parent company, is still to turn a profit and announced a loss of $350 million on revenue of $286 million for Q4 2017 (revenue increased 72% YoY).
That the share price is seemingly tied to the whims of celebrity endorsements could also be of concern to shareholders. Snap’s CEO, Evan Spiegel, also received a $638 million payout, comprising stock and compensation, in 2017 (according to Equilar, the highest paid CEO in the U.S. in 2017 was Thomas Rutledge, who was awarded $98 million)
It’s not all bad news. Snap’s Q4 results were better than forecasted and, despite criticising the redesign, Kylie Jenner has since returned to Snapchat and posted a number of updates over last weekend.
Snap Ads, the social network’s advertising platform, also performed better than expected in 2017. In a transcript of its earnings call, Snap reported it has increased advertising impressions by 4 times year-on-year.