Stocks in Snapchat’s parent company fell 17% after it discovered the app’s controversial redesign had made it less attractive to might-be users. Only four million new users had been added within the starting three months of 2018 – simply over half the wide variety forecast.
And Snap has warned increase and revenue may want to sluggish significantly in the second quarter. That is because the variety of everyday active customers on Snapchat is essential for generating advertising sales. The information turned into discovered within the company’s first results seeing that January’s overhaul of the messaging app.
Revenue jumped by more than half to $230.7m (£169.4m) in the first quarter, but also came in below analysts’ expectations. Snap blamed the redesign for “disrupting user behaviour” and creating some “apprehension” among its advertisers. A tweet from Kylie Jenner wiped £1bn off Snap’s stock market value after she said she wouldn’t use it any longer ‘Confusing’
The results mark a major reversal of fortunes for the parent company after Snapchat added 8.9m new users late last year. That quarterly jump in growth was the largest since Snap went public in March 2017. The new look design was meant to attract more new users, but many of Snapchat’s fans didn’t like it.
Celebrities publicly criticised the redesign and a tweet from Kylie Jenner wiped £1bn ($1.35bn) off Snap’s stock market value after she said she wouldn’t use Snapchat any longer.
Many people complained that feeds were confusing and not chronological. And one million people signed a petition calling on Snap to roll back the redesign or return to the previous version. Snap made the changes as a way for the social network to monetise its service by mixing in more adverts.
Media captionSnapchat has released Spectacles 2.0 with new features, new colours, and a new price
Sticking with the plan The firm has acknowledged that the new design hurt its results, but said the changes would drive growth in the long run.
“The redesign lays the foundation for the future of both our communication products and our media platform, and we look forward to doubling down on both,” chief executive Evan Spiegel said on a conference call with analysts.
Snap insisted it would stick with the plan to keep content from friends separate from other publishers.
And it seemed to brush aside concerns over any long-term impact on its earnings, adding that “a change this big” comes with “some disruption.”