A single tweet from Kylie Jenner perhaps has been more damaging for Snapchat despite its over 1.2 million users urging the company to change its “annoying” redesign through a signed petition.
There was a fall of 6 per cent in the shares of Snap following a Tweet by the celebrity: “sooo does anyone else not open Snapchat anymore? Or is it just me” to her 24 million followers. The drop erased about $1.3 billion from its market value and drew negative headlines.
But this was not just a one-day PR debacle for Snap according to some analysts and Snapchatters. Snapchat has been faced with nothing less than an existential crisis by fierce competition from Facebook, backlash from brands and influencers and new companies such as Musical.ly which has already become very popular in eh U.S. among children.
“We’re watching a company explode into bits,” said Eric Schiffer, CEO of private equity firm Patriarch Organization. Schiffer branded the redesign incident as the “greatest app debacle” he had ever seen in Silicon Valley. “This is a kiss of death to a brand like Snapchat with their base that has stuck with them”, he said.
Significant interface alteration changes which included differentiating content from between users and publishers were part of the redesign of Snapchat. It also included recognition of Snapchat Stories – videos and photos which disappear in 24 hours.
“The whole thing is an absolute mess,” said Scott Levy, CEO of social media agency Fuel Online. He noted that his firm’s advice to its clients it to generally avoid investment of resources on Snapchat. “People are not using it anymore. On top of that, you’re getting public celebrity backlash.”
The Stories feature of Instagram – a social media platform owned by Facebook, has been able to attract millions of users which has resulted in steep losses to Snap.
The Stories feature is very similar to Snapchat.
It was not likely to change the new design, said Snapchat last week despite the mounting criticisms.
Michael Pachter, a Wedbush Securities analyst said that there could be further suffering for the Snap stock and result in serious problems for the company if more users leave Snapchat and noting that the strategy adopted by Snapchat with regards to the redesign is a risky one. “They clearly didn’t do their homework in testing with users and anticipating reaction.”
Making Snapchat “more personal for everyone” as the aim of the redesign, a spokesman for Snapchat said. “This new foundation is just the beginning and we will always be grateful for any feedback from our community as we roll out new products”, the spokesman told the media in an e-mailed response.
Snapchat is facing problems because of the growing popularity of lesser known apps in addition to Instagram which is the dominating platform.
(Adapted from TheGuardian.com)