Snap Inc., the parent company of Snapchat, is set to overhaul its business strategy, concentrating on expanding its advertising revenue and advancing its augmented reality (AR) technology, following a period of substantial stock performance decline.
In a note to employees on Tuesday, CEO Evan Spiegel outlined the company’s renewed focus on these key areas. Spiegel acknowledged the company’s current difficulties, stating, “The answer is simple: our advertising business is growing slower than our competitors.” Snap has been struggling to compete with major social media platforms like Meta Platforms and TikTok for advertising dollars, which has contributed to its poor stock performance.
Snap’s stock has plummeted by approximately 48% this year alone, reflecting investor concerns about the company’s slow revenue growth and competitive challenges. The company had previously forecast a weak performance for the current quarter, projecting a fiscal 2024 revenue of $5.34 billion, according to LSEG data.
To address these issues, Snap plans to revamp its advertising strategy by introducing new ad placements enhanced by machine learning and automation. This move aims to improve ad performance and attract more advertisers to the platform.
In addition to its advertising efforts, Snap is investing heavily in augmented reality and smart glasses technology. Spiegel highlighted the company’s commitment to developing AR glasses designed to revolutionize how users interact with digital content and the real world. “We are investing in creating augmented reality glasses that allow people to interact with computing, the world, and one another in totally new ways,” he noted.
Snap’s push into AR follows the launch of generative AI tools in June, which offer users more realistic effects for their selfies and video content. This technology is part of Snap’s broader strategy to innovate and differentiate itself in a crowded social media market.
The company’s renewed focus on these areas signals its intent to strengthen its market position and reverse its recent financial setbacks.
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