Snap (SNAP.N), opens new tab missed Wall Street’s quarterly revenue estimates on Tuesday, as the Snapchat owner struggled to compete with larger rivals for digital advertising revenue, sending its stock down 30%.
Though its features are frequently copied by competitors, investors have long questioned Snap’s ability to compete with tech behemoths such as Facebook owner Meta Platforms (META.O).
Google’s Ad Business
Opens a new tab, and Alphabet (GOOGL.O), which have more data to target advertisements. Meta’s advertising sales increased by 25% in the December quarter.
Google’s ad business grew by 11%, while YouTube ad sales increased by 16% during the same period.
Snap has failed to demonstrate that it can capitalise on a healthy advertising market, which has largely remained resilient despite economic uncertainty.
“It hints that Snap’s concerns are not macroeconomic in nature but mainly internal,” he said.
During a conference call with analysts, LightShed Partners analyst Rich Greenfield asked Snap CEO Evan Spiegel if the company was “fundamentally disadvantaged” in comparison to larger competitors.
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