Speaker 1: In earnings news, Snap reported its slowest quarterly sales growth
Speaker 1: ever and joining us now for a closer look. As
Speaker 1: Kurt Wagner Bloomberg Technology report him, So, Snap is not
Speaker 1: exactly a bill Weather and it's probably not big enough
Speaker 1: for us to feature it, but we were doing so
Speaker 1: because we want to get the read through Kurt, for
Speaker 1: the industry generally advertising, and particularly with the companies like
Speaker 1: Meta and Google trading down in after hours. And let
Speaker 1: me just get our audience the latest down down for
Speaker 1: Snap after the earnings. How much of a read through
Speaker 1: will there be for companies like Meta and Google. Yeah,
Speaker 1: these companies that all you know do digital advertising, they
Speaker 1: tend to move in a pack, right and and so
Speaker 1: that's why you're seeing Snap report poor earnings and these
Speaker 1: other companies are seeing to sell off as well. So
Speaker 1: that happened to be first this quarter in terms of
Speaker 1: reporting earnings. As you mentioned, it wasn't great. I do
Speaker 1: think that has some uh kind of preparation or that
Speaker 1: prepares us somewhat for for the facebooks and Google's of
Speaker 1: the world to go. I will say though Snap has
Speaker 1: been a little bit more dramatic in terms of the
Speaker 1: impact of some of the advertising related changes like things
Speaker 1: to Apple's iOS. Feels like that's hit Snap maybe a
Speaker 1: little harder than some some other companies. So I'm not
Speaker 1: necessarily sure if this is exactly going to correlate with
Speaker 1: those others. But again, they tend to move directionally together,
Speaker 1: and so that's why you're seeing that sell off cut.
Speaker 1: The chap price actually from thirteen months ago when it
Speaker 1: was at the peak is down. Okay, that's one thing
Speaker 1: which doesn't inspire confidence. The number two things, what's the
Speaker 1: point of this company? Well, uh, it's very popular with
Speaker 1: young people and it's a message Well it's it's a
Speaker 1: user base is still growing, so I would I guess
Speaker 1: I would push back slightly. Now you could argue whether
Speaker 1: or not, uh it's you know, necessarily has the same
Speaker 1: utility as as some of the other messaging services out there,
Speaker 1: but I mean it's user based. Did grow. They added
Speaker 1: fifty seven million new users in the past a year,
Speaker 1: and so when you think about that, there are still
Speaker 1: a lot of people who want to use this product,
Speaker 1: who use it to message or to get you know,
Speaker 1: entertaining content. What Snap needs to figure out is how
Speaker 1: to make money from those people. Right, It's clearly adding people.
Speaker 1: It's not making money from them as well as it
Speaker 1: needs to. Well, it may have lost a fair bit
Speaker 1: of influence to TikTok. I think that's right. I I
Speaker 1: you know, I feel like we're talking a lot about
Speaker 1: the ad industry hurting Snap. I don't think we're talking
Speaker 1: quite enough about the impact of TikTok, right, I mean,
Speaker 1: to Mark Zuckerberg's credit, he has said that TikTok has
Speaker 1: been a huge hit on Facebook and it's growth. I
Speaker 1: feel like we haven't heard quite as much of that
Speaker 1: from Snap. But you know, they're playing in the same sandbox,
Speaker 1: if you will. They're going after a lot of the
Speaker 1: same users. So I imagine that TikTok is having quite
Speaker 1: an impact on on snaps user based and growth as well.
Speaker 1: So I think we should. You know, I thought about
Speaker 1: it was when this market, this company did come to
Speaker 1: market that it's sure it's it may have a big
Speaker 1: user base and did have a huge user base. Um,
Speaker 1: but the thing is it's the wrong demographic. They don't
Speaker 1: have the money, right. That's always been the knock on
Speaker 1: on young users. Right. On the one hand, everybody wants
Speaker 1: teens and young adults on their platform, because that's how
Speaker 1: you build those lifelong relationships, right, you get people to
Speaker 1: to fall in love with your product when they're young.
Speaker 1: On the other hand, those aren't the people with a
Speaker 1: lot of buying and spending power, as you just pointed out.
Speaker 1: And I think that's always sort of been an issue
Speaker 1: with Snap, not only uh, you know, because their users
Speaker 1: might not have the disposable income, but they haven't been
Speaker 1: great at what are called direct response ads either, which
Speaker 1: are kind of those really precisely targeted ads, like you know,
Speaker 1: selling you a pair of shoes right then and there.
Speaker 1: Right Those are the types of things that maybe young
Speaker 1: people might be more willing to do, but you have
Speaker 1: to have the ad system set up to do that,
Speaker 1: and I don't think Snap ever really quite got there. Yeah,
Speaker 1: I guess it's not the right corollary. But you know,
Speaker 1: there's a lot of films that are made for teenagers,
Speaker 1: but then they do pay the the you know, they
Speaker 1: buy the ticket and go in. It's not the same
Speaker 1: as advertising. Kurt, out of time, but thanks very much
Speaker 1: for being with us. Kurt Wagner and Bloomberg Technology Report