Facebook is Stealing Snapchat’s Thunder

Snapchat is going to be the hot IPO this year, and it’s stealing the buzz from its bigger competitors. But Facebook isn’t just sitting back to watch. The company is using its photo-sharing app Instagram to mimic a popular Snapchat service and grab more ad dollars in the process.

New figures reveal just how quickly Instagram is growing its Snapchat-like “Stories” feature. Stories lets people put together photos and videos in clips they share with friends. It now has 150 million users, up from 100 million three months ago. Snapchat reportedly had 150 million users as of June.

And now Facebook is adding ads to the service, rolling them in between stories. If it works, Facebook may have a head start in monetizing these kinds of apps, helping Instagram make partnerships with advertisers before Snapchat can ramp up its ad business. Instagram could pull in $3.6 billion in ad revenue this year, according to eMarketer. Snapchat’s revenue will likely be just below $1 billion, eMarketer projects.

Snapchat still has several advantages – an impressive 70% of Americans ages 18 to 24 with smartphones use the service. That’s obviously a coveted demographic, and Facebook needs to be worried that it’s becoming the boring social network. But even if Facebook becomes “that thing that old people do”, Instagram should keep the company relevant among young people – and advertisers.

Big Picture: Instagram’s Stories feature is becoming more popular, and Facebook is moving fast to monetize it.


Post a Comment