Snap will focus on expanding and diversifying its underperforming advertising business, with a focus on augmented reality (AR), CEO Evan Spiegel said in a note to employees on Tuesday.
The announcement comes amid a challenging period for Snapchat’s owner, as the company competes with major social media players such as Instagram parent Meta Platforms and Bytedance’s TikTok for ad revenue.
“You may be wondering why, with all the progress we have made in our business over the past year, our stock price is lagging the overall market. The answer is simple: our advertising business is growing more slowly than our competitors,” Spiegel said in the note.
In early August, Snap forecast a weak outlook for the current quarter, citing a decline in ad spending. The company is now expected to report revenue of $5.34 billion (roughly Rs. 44,837 crore) in fiscal 2024, according to data from LSEG.
Snap’s shares have fallen about 48 percent so far this year.
The company will also be revamping its go-to-market strategy by launching new ad placements powered by Machine Learning (ML) and automation.
The company also develops AR and smart glasses, like industry peer Meta.
“We are investing in the development of AR glasses that will enable people to interact with computers, the world and each other in entirely new ways,” the memo said.
In June, Snap launched generative AI tools that let users apply more realistic effects when using their phone camera to film themselves.
© Thomson Reuters 2024
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