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As skeptical as I am that Snap will ever be a moneymaker, this data point is not meaningful in any way. Facebook traded below (often _well_ below) its IPO price

As skeptical as I am that Snap will ever be a moneymaker, this data point is not meaningful in any way. Facebook traded below (often _well_ below) its IPO price for the first 15 months on the market.

bdcravens 9y ago
I don't think the two are equivalent however.
- exelius 9y ago
  Agree with you here -- Facebook had a well-formed mobile strategy, the only question was whether it would work. Once it started to work, the stock took off like a rocket. Snap is a much bigger question mark. So far their plan looks to be "Do what Facebook did, only for AR/VR". Except Facebook and Snap will be splitting the market; where Facebook had no competition and absolute dominance before they IPOed. Facebook is obviously playing to win on Snap's home turf. Even if Snap is successful, Facebook will make it very expensive for them.
  - wuliwong 9y ago
    I haven't been following SnapChat too closely, I know they made some glasses not too long ago. It is surprising to me that they are trading on the ID that they will be more successful in AR/VR. I can't imagine have invested nearly as much into AR/VR as Facebook/Oculus. Amount invested doesn't mean success for sure but I expect Facebook to be at the forefront of AR/VR at least in the near future.
    - bdcravens 9y ago
      My understanding is that the glasses were little more than a gimicky way to get more use of their platform. Felt kinda CueCat-ish to me.
    - giobox 9y ago
      AR is unfortunately such a broad label, covering an enormous variety of implementations from dedicated headsets to phone cameras. I'd argue Snapchat delivered one of the first mainstream AR 'hits' - many of my friends can't get enough of their AR photo filters. To be fair, many of them are extremely impressive tech demos, fluidly augmenting the user's face in real time video. Whether that's a meaningful strategic advantage is another question!
    - exelius 9y ago
      Right; AR is significantly less useful without a massive data platform backing it up. But the real problem is that Snap doesn't really have too many paths for growth that don't run into Facebook's existing network effects. Facebook is already a top aggregator -- and already has a lot of preference data from billions of users. Those are enormous network effects, and even if Snap is hugely innovative, Facebook will always be able to replicate Snap's products much faster and better than Snap will be able to replicate Facebook's network effects.
- tunetine 9y ago
  Facebook's IPO was botched which caused a pretty big slide the day of the offering. The next two weeks it continued to go further below IPO price to -50%. Quarter after quarter analysts questioned if they could maintain growth and profits.
likpok 9y ago
Facebook was profitable before it went public, and faced serious strategic challenges immediately post IPO (specifically, mobile was exploding and Facebook's mobile story was not good -- it didn't even have advertising). I guess the meaningfulness of this data point is that people are dubious that SNAP will succeed long term. But that's somewhat tautological: if people thought SNAP would succeed, they'd buy it.
- capkutay 9y ago
  Facebook's mobile story 'was not good'...but it was clearly just a missing set of features in a product that was ripe for infiltrating mobile and they had the cash to buy to eventually buy instagram. The question is whether Snapchat is fundamentally flawed or a few features away from becoming a strong company. It just seems to me that they have too much competition against Facebook...a behemoth that's still innovating. If some company came out with a cool twist on search after Google, I'd be bearish on them as well.
  - sjg007 9y ago
    Alexa amazon is the next gen search.
  - kungito 9y ago
    How exactly have they been innovating in the last 5 years? They bought Instagram and WhatsApp and added SnapChat features to them
    - capkutay 9y ago
      They're still an innovative company. They have one of the world's strongest engineering organizations and an executive team that has the vision to jump into new, hot areas. By all measures they're still innovative especially for their size...
- puranjay 9y ago
  I've seen a big shift among my friends (all below 30) social media usage in the last six months. Used to see a random one-off Whatsapp story. Now I see 2-3 stories every day. Instagram stories are much more popular. See anywhere from 5-20 stories from friends as well as brands. Point is, people who use these stories will never shift to Snapchat now. Even if it doesn't grow Facebook's audience, these features will plug the leaks
skinnymuch 9y ago
Fb also bought IG at their IPO time and WhatsApp 2 years later. Both combined should be worth over $100B today. Compared to the roughly $20B spent. Obviously FB is still worth over $300B if we hypothetically chop $100B off. Far above IPO still. Just saying that FB had multiple things go very well for them to go from merely profitable at IPO to being the giant it is now -- mainly mobile exploding, but other things too. This doesn't matter too much, but it also feels like Snapchat has more competition in a way too while growing. Besides other social networks and FB copying them, Snow is gaining ground in Asia right now. FB primarily had regional competitors limited to one main country (like VK or Orkut in Brazil). I could be wrong about this though.
- dntrkv 9y ago
  Google Plus was a very real competitor when they launched (right around the time of Facebook's IPO), it was a very similar situation to that of Snapchat vs Instagram. Huge user growth very quickly, but most of it due to it being attached to Gmail. Not saying Instagram won't remain a real competitor to Snapchat, but it's possible that over time users will go back to their previous habits. Personally, I never post anything on Instagram Stories, but I do view them because they are there. I have my Instagram feed curated for my Instagram audience (which is very public and intended for things that aren't private), and Snapchat for my Snapchat audience (which is private and intended for only friends and family). I know many others do the same.
  - sbov 9y ago
    Google Plus was a last ditch effort by a company to get, and keep, any kind of foothold in a market that they continually failed at. It was to my knowledge, at the very least, their fourth attempt (Orkut, open social, Google Buzz, Google Plus... am I missing one?). Calling it a "very real competitor" seems a bit overstated.
    - dntrkv 9y ago
      Like my comment below states, Google Plus grew to 30M users in their first month and 90M by the end of the year. During this time they were considered a real competitor and many people were predicting that they could dethrone Facebook and that there is nothing that says another competitor won't come along and do to Facebook what they did to Myspace. Sure, looking back now it's easy to say Google Plus was a failure, but at the time people were really excited about it. Check out this graph of their growth: And again, the reason for my post is that I wanted to point out there were people worried about competitors taking away market share from Facebook during their IPO just like there are people worried about competitors to Snapchat. It's only now that it's easy to discount those competitors because we see how it played out, at the time people were really excited about it, check out this graph: http://i.imgur.com/yQU2Y2z.jpg http://i.imgur.com/yQU2Y2z.jpg
jnisenbom 9y ago
As of 2015 YouTube reportedly hadn't turned a profit but was breaking even [1, 2]. If the world's number 2 website's business model wasn't turning profits after 9 years... we can probably expect the same for snap. Definitely makes you wonder about the viability of the ad revenue model. [1] https://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967 https://www.wsj.com/articles/viewers-dont-add-up-to-profit-f... [2] http://www.businessinsider.com/youtube-still-doesnt-make-google-any-money-2015-2 http://www.businessinsider.com/youtube-still-doesnt-make-goo...
- jonwachob91 9y ago
  Youtube didn't try to go public before becoming profitable.
- sjg007 9y ago
  It's an evolving market. TV / apps / video are all converging. You can look at the first 10 years of YouTube as customer acquisition. It's a long game. Snap is likely similar as is twitter. This realtime private zeitgeist.

As skeptical as I am that Snap will ever be a moneymaker, this data point is not meaningful in any way. Facebook traded below (often _well_ below) its IPO price for the first 15 months on the market.

bdcravens 9y ago

I don't think the two are equivalent however.

exelius 9y ago
Agree with you here -- Facebook had a well-formed mobile strategy, the only question was whether it would work. Once it started to work, the stock took off like a rocket. Snap is a much bigger question mark. So far their plan looks to be "Do what Facebook did, only for AR/VR". Except Facebook and Snap will be splitting the market; where Facebook had no competition and absolute dominance before they IPOed. Facebook is obviously playing to win on Snap's home turf. Even if Snap is successful, Facebook will make it very expensive for them.
- wuliwong 9y ago
  I haven't been following SnapChat too closely, I know they made some glasses not too long ago. It is surprising to me that they are trading on the ID that they will be more successful in AR/VR. I can't imagine have invested nearly as much into AR/VR as Facebook/Oculus. Amount invested doesn't mean success for sure but I expect Facebook to be at the forefront of AR/VR at least in the near future.
  - bdcravens 9y ago
    My understanding is that the glasses were little more than a gimicky way to get more use of their platform. Felt kinda CueCat-ish to me.
  - giobox 9y ago
    AR is unfortunately such a broad label, covering an enormous variety of implementations from dedicated headsets to phone cameras. I'd argue Snapchat delivered one of the first mainstream AR 'hits' - many of my friends can't get enough of their AR photo filters. To be fair, many of them are extremely impressive tech demos, fluidly augmenting the user's face in real time video. Whether that's a meaningful strategic advantage is another question!
  - exelius 9y ago
    Right; AR is significantly less useful without a massive data platform backing it up. But the real problem is that Snap doesn't really have too many paths for growth that don't run into Facebook's existing network effects. Facebook is already a top aggregator -- and already has a lot of preference data from billions of users. Those are enormous network effects, and even if Snap is hugely innovative, Facebook will always be able to replicate Snap's products much faster and better than Snap will be able to replicate Facebook's network effects.
tunetine 9y ago
Facebook's IPO was botched which caused a pretty big slide the day of the offering. The next two weeks it continued to go further below IPO price to -50%. Quarter after quarter analysts questioned if they could maintain growth and profits.

likpok 9y ago

Facebook was profitable before it went public, and faced serious strategic challenges immediately post IPO (specifically, mobile was exploding and Facebook's mobile story was not good -- it didn't even have advertising). I guess the meaningfulness of this data point is that people are dubious that SNAP will succeed long term. But that's somewhat tautological: if people thought SNAP would succeed, they'd buy it.

capkutay 9y ago
Facebook's mobile story 'was not good'...but it was clearly just a missing set of features in a product that was ripe for infiltrating mobile and they had the cash to buy to eventually buy instagram. The question is whether Snapchat is fundamentally flawed or a few features away from becoming a strong company. It just seems to me that they have too much competition against Facebook...a behemoth that's still innovating. If some company came out with a cool twist on search after Google, I'd be bearish on them as well.
- sjg007 9y ago
  Alexa amazon is the next gen search.
- kungito 9y ago
  How exactly have they been innovating in the last 5 years? They bought Instagram and WhatsApp and added SnapChat features to them
  - capkutay 9y ago
    They're still an innovative company. They have one of the world's strongest engineering organizations and an executive team that has the vision to jump into new, hot areas. By all measures they're still innovative especially for their size...
puranjay 9y ago
I've seen a big shift among my friends (all below 30) social media usage in the last six months. Used to see a random one-off Whatsapp story. Now I see 2-3 stories every day. Instagram stories are much more popular. See anywhere from 5-20 stories from friends as well as brands. Point is, people who use these stories will never shift to Snapchat now. Even if it doesn't grow Facebook's audience, these features will plug the leaks

skinnymuch 9y ago

Fb also bought IG at their IPO time and WhatsApp 2 years later. Both combined should be worth over $100B today. Compared to the roughly $20B spent. Obviously FB is still worth over $300B if we hypothetically chop $100B off. Far above IPO still. Just saying that FB had multiple things go very well for them to go from merely profitable at IPO to being the giant it is now -- mainly mobile exploding, but other things too. This doesn't matter too much, but it also feels like Snapchat has more competition in a way too while growing. Besides other social networks and FB copying them, Snow is gaining ground in Asia right now. FB primarily had regional competitors limited to one main country (like VK or Orkut in Brazil). I could be wrong about this though.

dntrkv 9y ago
Google Plus was a very real competitor when they launched (right around the time of Facebook's IPO), it was a very similar situation to that of Snapchat vs Instagram. Huge user growth very quickly, but most of it due to it being attached to Gmail. Not saying Instagram won't remain a real competitor to Snapchat, but it's possible that over time users will go back to their previous habits. Personally, I never post anything on Instagram Stories, but I do view them because they are there. I have my Instagram feed curated for my Instagram audience (which is very public and intended for things that aren't private), and Snapchat for my Snapchat audience (which is private and intended for only friends and family). I know many others do the same.
- sbov 9y ago
  Google Plus was a last ditch effort by a company to get, and keep, any kind of foothold in a market that they continually failed at. It was to my knowledge, at the very least, their fourth attempt (Orkut, open social, Google Buzz, Google Plus... am I missing one?). Calling it a "very real competitor" seems a bit overstated.
  - dntrkv 9y ago
    Like my comment below states, Google Plus grew to 30M users in their first month and 90M by the end of the year. During this time they were considered a real competitor and many people were predicting that they could dethrone Facebook and that there is nothing that says another competitor won't come along and do to Facebook what they did to Myspace. Sure, looking back now it's easy to say Google Plus was a failure, but at the time people were really excited about it. Check out this graph of their growth: And again, the reason for my post is that I wanted to point out there were people worried about competitors taking away market share from Facebook during their IPO just like there are people worried about competitors to Snapchat. It's only now that it's easy to discount those competitors because we see how it played out, at the time people were really excited about it, check out this graph: http://i.imgur.com/yQU2Y2z.jpg http://i.imgur.com/yQU2Y2z.jpg

jnisenbom 9y ago

As of 2015 YouTube reportedly hadn't turned a profit but was breaking even [1, 2]. If the world's number 2 website's business model wasn't turning profits after 9 years... we can probably expect the same for snap. Definitely makes you wonder about the viability of the ad revenue model. [1] https://www.wsj.com/articles/viewers-dont-add-up-to-profit-for-youtube-1424897967 https://www.wsj.com/articles/viewers-dont-add-up-to-profit-f... [2] http://www.businessinsider.com/youtube-still-doesnt-make-google-any-money-2015-2 http://www.businessinsider.com/youtube-still-doesnt-make-goo...

jonwachob91 9y ago
Youtube didn't try to go public before becoming profitable.
sjg007 9y ago
It's an evolving market. TV / apps / video are all converging. You can look at the first 10 years of YouTube as customer acquisition. It's a long game. Snap is likely similar as is twitter. This realtime private zeitgeist.