When most of us first heard of it a few years ago, Snapchat seemed like a cheesy-sounding service whose primary feature—the ability to have photo messages disappear automatically after 10 seconds—made it sound like nothing more than a tawdry “sexting” app for teens.
How times have changed.
That cheesy-sounding app now has a theoretical market value of about $20 billion, thanks to the devotion of its growing base of users, who reportedly number more than 150 million a day. That makes the company larger than Twitter, according to some estimates.
And Snapchat has gradually expanded its service to appeal to a larger proportion of the video-sharing crowd, to the point where it gets about 10 billion video views a day.
The latest step in that expansion is a new feature the company is calling “Memories,” which allows users to save photos and videos and look at them later. In other words, Snapchat just introduced a feature that essentially reverses its original value proposition, which was the ephemerality of messages that automatically self-destructed.
Like the company’s Discover section, where users can browse news from media partners such as CNN and BuzzFeed, the new Memories feature may make Snapchat more appealing to an older user group. But this also raises the prospect that the service’s hard-core millennial fans might get turned off by the new additions before enough older users sign up.
Ironically, Facebook launched a feature of its own this week that is somewhat similar to Snapchat’s: Users in a new test will be able to save videos for offline viewing on the giant social network. And the goal of both features is likely similar—namely, to boost engagement levels to appeal to advertisers (which Snapchat is also doing).
But there the comparison stops, at least so far. Facebook has already more or less justified its $330 billion market valuation with revenue of $20 billion last year. But Snapchat likely had revenue of about $100 million in 2015, with promises of as much as $300 million this year.
The company’s ability to produce that kind of growth is going to determine whether it’s actually worth its $20 billion valuation, or whether that’s going to disappear the same way its photos and videos used to.
BITS AND BYTES
EMC-Dell deal receives important seal of approval. High-profile financial advisory firm Glass Lewis gave a thumbs-up to the $59 billion deal Wednesday, encouraging EMC shareholders to vote “for” the union. (Fortune)
Samsung expects best profit in more than two years. The world’s biggest smartphone maker shipped an estimated 16 million Galaxy S7 devices from April to June, extending its recovery. The company forecasts second-quarter operating income at $7 billion, with details due in late July. (Reuters)
Another day, another security software merger. Avast will pay $1.3 billion to buy antivirus specialist AVG Technologies. The two companies claim a combined reach 400 “endpoints”—160 million of them are mobile devices. (Reuters)
Alphabet’s venture arm backs ‘radical’ digital camera venture. Light’s first product L16—a device that combines the features of 16 different cameras in one—has generated “millions” of preorders. The $30 million infusion by GV boosts total backing to $65 million. (Financial Times)
Zenefits co-founder Parker Conrad is busy with new startup. Details are sketchy, but sources says his new venture will appeal to companies that need help managing IT and HR processes. The question: Can Conrad find backers amid ongoing controversy about his mistakes at his former company? (Fortune)
Alibaba’s cloud team poaches Microsoft veteran. Zhou Jingren, who focused on search technology and big data analytics for the software giant, will lead research efforts in Beijing and Hangzhou, China, and Seattle. AliCloud is much smaller than big rivals like Microsoft and Amazon, but it claims 500,000 paying customers for its cloud services. (Wall Street Journal)
Walmart reaches mobile payments milestone. The company can now accept Walmart Pay at all 4,600 U.S. stores. The app is the biggest rival yet for Apple Pay, and a crucial component of the retailer’s revamped customer loyalty program. (Fortune)
Verizon Wireless won’t compete on price. The carrier’s latest plans boost data allowances by as much as 33% and add a rollover feature. The downside: Standard monthly charges on the plans are as much as 17% higher than previous fees. (Fortune)
Facebook debuts new conference for women. The gathering, scheduled for mid-September, will assemble experienced female product managers from across the tech industry. (Fortune)
Watch for new version of Microsoft’s back-office apps. The company is overhauling the cloud edition Dynamics, its business software for accounting, human resources, and customer service processes. The move will position the software giant more aggressively against longtime rivals Oracle, Salesforce, and SAP. (Bloomberg, Wall Street Journal)
Lies, damned lies, and cloud adoption numbers. Last week a survey of 100 chief information officers by Morgan Stanley found that more than half of those surveyed (53%) said those companies do not use any public cloud infrastructure at all. They expect that number to drop to 9% in the next three years.
That number drew disbelief from IT pros in the trenches who said it is extremely likely that these CIOs A: don’t know what’s going on in their own organizations, or B: are preventing their own companies from taking advantage of the flexibility of using Amazon Web Services, Microsoft Azure, or Google Cloud Platform for some applications. Here’s what the numbers suggest.
IN CASE YOU MISSED IT
General Motors and NASA Lend Robotic Arm to Healthcare, by Jonathan Vanian
Twitter Tests Live Sports Feature With Tennis from Wimbledon, by Mathew Ingram
Facebook Project to Bring Mobile Phones to Poorest Regions, by Aaron Pressman
More Than Half a Million Hoverboards Are Being Recalled, by Michal Addady
Will Algorithms Persuade People to Drink More Wine? by Rachel King
ONE MORE THING
Tesla’s autopilot crash was ‘material,’ then it wasn’t. The first known fatality related to the electric carmaker’s autopilot feature occurred 11 days before Tesla sold $2 billion in a May 18 stock offering. Yet, no mention was made to investors until reports emerged last week. After two Fortune articles questioned the timing and nature of the disclosure, Tesla offered this statement. (Fortune)