Snapchat: Looking to make the jump

We all got the message this morning. Snapchat “stories” is here.

For those of us who may not know what Snapchat is: it is a social media application for mobile devices. The whole idea is to send pictures to your friends, but theres a catch: the pictures are automatically deleted after a maximum of 10 seconds. The picture can set different lengths of time for the picture to last on the receiver’s phone, but the maximum is 10. The app is perfect for sending your friends a goofy picture of your face that you never want them to save. Or, as Bloomberg Businessweek described the app, it is “the people’s champ of smartphone peep shows.”

No matter how it gets used, the small social media app is competing with the big boys. To begin offering more than pictures, Twitter — which filed its form s-1 today — created Vine. Vine allows users to share small videos. Instagram also started offering video capabilities to spice up its endless stream of still-pictures.

Snapchat hung tough and started offering video capabilities too. But now Snapchat is looking to lead the pack. With its rare mass-message from the teamsnapchat to all Snapchat users, the firm announced the newest innovation that allows users to compile images from a 24-hour period and share it with friends. Snapchat “stories” is basically an option for snappers to compile all of their normal pictures and videos in one 24-hour period and send it to friends as a Snapchat-slideshow all at once.

With the industry’s follow-the-leader nature, it will be interesting to see if Twitter, Instagram or Facebook will try and find something to counter. A Hotelling line would show the major players hovering towards the middle. The consensus to offer video capabilities only pushed the firms closer to the middle. Snapchat is trying to move away from the middle and gather more of the market with the “stories” concept. We just have to see who will follow them.

4 thoughts on “Snapchat: Looking to make the jump

  1. At what point comes a limit to a tech company’s verticle growth? All of the companies listed above are growing primarily internally to compete with their competitors. Do you think there is a time in the near future when these companies will be forced to grow horizontally through mergers and acquisitions in order to upset the equilibrium of the Hotelling model and gain more market share?

  2. In the background to the “vertical” (sp!) growth query is whether the underlying market is growing in revenue terms. It also seems to be one with low entry barriers, if twitter and facebook can draw upon their infrastructure and customer base.

    The firm may have a snappy concept, but can they make it pay? Such an ephemeral attention span strikes me as closely associated with teen years, and while there are lots of teens out there, is that really a rich market?

  3. Snapchat is a free application and does not require a subscription fee to use. I am surprised that Snapchat Inc. has not incorporated more advertising as a source of revenue. The new “stories” innovation might be a platform for which Snapchat Inc. might add advertising since the image does not disappear after ten seconds.

    Another question that arises is whether Snapchat is just a fad. If Snapchat Inc. does not continue to make innovations to its product it may see a decline in use. I believe that the firm will eventually have to expand horizontally through mergers and acquisitions in order to grow.

  4. A recent article in the Wall Street Journal compared this year’s tech IPOs to those of the dot-com era. Snapchat is a two-year-old company, but is just now starting to sketch out its business model. The company appears to be following the path laid out by other tech giants like Facebook, Twitter and Pinterest. In June, Snapchat raised $60 million. Within four months the company released the new Snapchat “stories” aspect. The WSJ article said the company is considering raising an additional $200 million.

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