Hello hello and welcome back to Week in Review. Last week I wrote about the possibility of an impending relaxation on social media. This week, I'm talking about an increasing threat to Facebook Branch.
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First, let me say how hard it was to resist writing about Quibi This week, but those settings came very hot the second the news fell, and I've already written a little about it here. All I'm going to say is that while Quibi has had its own unique mobile problems, unless Apple changes course or spends a ton of money buying content to fill its back library. I think TV + is next on the chopping block.
– Lucas Matney (@lucasmtny) October 21, 2020
This week I'm looking at another once vicious startup, although this one has caused quite a turnaround in the past two years. Snap, The maker of Snapchat released a killer earnings report this week. As a result, investors have driven the share price higher. Market capitalization has nearly doubled since early September, and it's clear that Wall Street actually believes that Snap could significantly increase its footprint and challenge Facebook.
The company ended the week with a market cap of just under $ 65 billion, which is still a long way from Facebook's $ 811 billion, but looks significantly better than it did in early 2019 when it was worth about a tenth of what it is today . Suddenly Snap has a new challenge that lives up to the high expectations.
The company said it had sales of $ 679 million for the third quarter, up 52% year over year. The company currently has 249 million daily active users, up 4% from the last quarter.
Facebook will be reporting its Q3 earnings next week, but they're still in a different environment for now, even if their market cap is only about 12 times that of Snaps, their quarterly revenue from the second quarter was about 28 times higher than that the one just reported by Snap. Facebook now has 1.79 billion active activities per day, only about seven times the number of Snapchat.
Snap has spent a tremendous amount of time proving the value of the features that have propelled them for years, but the company's next challenge might be to diversify their future. The company has flirted with augmented reality for years and is patiently waiting for the right moment to expand its scope. Snap didn't have the luxury of diverting resources from efforts that didn't send users back to their core product. Some of the biggest product launches of 2020 were embeddable mini-apps for things like ordering movie tickets or bite-sized social games that bring even more social opportunities to the chat.
Snap's laser focus was obviously a big part of its recovery here, but as expectations rise, it will also require the company to move more boldly into expanding its empire. I don't think Snapchat Trader has yet to buy Joe's or his own ISP, but if he's working toward his next platform in search of his next platform, the service can't settle for Twitter-sized ambitions and give them the chance to have a more expansive future to find.
Trends of the week
These next few weeks are guaranteed to be dominated by US election news. So enjoy the variety of messages that are out there while it lasts …
Quibi is dead
Few companies that have raised this much cash are as dead on arrival as Jeffrey Katzenberg's mobile video startup Quibi. This week the company made the decision to shut down and cease operations. More here.
Pakistan bans TikTok
It appears that the cascading threat from country to country is TikTok Prohibitions have stopped for the time being. This week, TikTok was unblocked in Pakistan and the government warned the company that it must actively monitor content or it would face a permanent ban. Read more here.
Facebook dating arrives in Europe
Facebook Dating didn't do much to fire Tinder in the US, but the service didn't even get a chance to test its luck in Europe due to some regulatory issues related to its privacy practices. Now it seems that Facebook has landed in the temporary good hands of the regulators and has given the go-ahead for the launch of the service in a number of European countries. Read more here.
Until next week,