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Thoughts on Snapchat spurning $3 & $4 Billion Offer, Instagram Direct, and Facebook Video Ads leak

Lots of news in the social space but I’ll focus on Facebook taking up the bulk of the headlines these days.  As you’ve probably heard, Snapchat turned down two acquisitions offers. One from Facebook for $3 billion dollars and another rumored offer for $4 billion.

I think Snapchat made the mistake of turning down the two offers because unlike Instagram, they don’t have a marketing platform for brands to pay to use (plus the offer was all cash!). Yes, I know brands like Taco Bell are being creative with the way they target teens but it’s not a platform every brand can use. That’s the biggest issue for any social platform – getting brands to create compelling content and maintain long-term engagement with those users. Snapchat just doesn’t have that right now and if they were to ever implement a paid strategy, it will have to something much different than their current iteration of their ephemeral product.  I wont’ even go into how fickle the 13-25 year old group is.  If Snapchat releases an ad product that disrupts users, you can bet they’ll leave in a heartbeat.

In Snapchat’s defense, it’s hard to sell when you’re the hottest platform in the social space but they need to be realistic on their potential.   They did hire Emily White, who was responsible for Instagram’s recent ad product (which wasn’t that difficult to come up with. I mean it’s an image-based platform, so brands will obviously share images. The greater success was not getting too much negative feedback on the ads.), so maybe she can come up with something for Snapchat.

So what does Facebook do once they get spurned? They come out with a competing product. They tried this against Snapchat in the past with Poke, which was a massive failure.  But this time they rolled it out on Instagram called Instagram Direct, which I think may end up hurting them in the long run. As I said on Twitter, turning Instagram into a messaging platform will further push younger users away from FB. We know they’re already making the move, so this is just another step in that direction.

Instagram Direct isn’t exactly a competing product against Snapchat. Messages don’t disappear and it still lacks some features but it shows how important messaging is becoming to Facebook.  And it’s also clear what their strategy looks like against competitors, get acquired or face the wrath of Facebook’s size (which may not mean much if users don’t move over). 

The final Facebook news this week was the leaked presentation about their upcoming video ads.  While I predicted something like this coming to Instagram (some variation of this already exist if you share Instagram videos on FB, the mobile version of the News Feed auto-plays Instagram videos), this leaked presentation confirms that it’s on the way on Facebook.  Users will get the videos in the News Feed but sound will be turned off so it’s not distracting users as they scroll through the feed.  I think Facebook will make a ton of money from video ads but they may also lose users in the process. Its one thing to ignore sponsored posts with images but a video will push users off the platform even more. Again, that’s just my perspective but I have been right in the past.

 

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Snapchat’s Business Model, In-App Purchases, Will Not Work

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Snapchat yesterday announced their business model for their popular message service, in-app purchases.  While I think it’s a great way to give users options, over time users may not care about these advertising options. The novelty factor of stickers or cool effects will eventually wear off. Take a look at what happened to Words with Friends, which also sold in-app purchases. Over time users stopped caring about the game and advertising revenue just dipped tremendously.  It probably didn’t help that it was acquired by Zynga at the height of its popularity, so a decrease in usage was right around the corner.

The other big example is Hipstamatic. It was the first photo app with filters but Instagram’s popularity just shot straight up as a result of the free offerings, while Hipstamatic struggled to make money via in-app purchases.

I think in a year SnapChat will cease to exist, will be acquired by one of the bigger media companies or worst, lose market share to a new startup.

Where do you think SnapChat will be in a year? Will their business model work?

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Online Personalities Harming Offline Opportunities

As the title suggests, this post is about how online personalities continue to harm offline opportunities for those looking for jobs, a raise, new opportunities or even a promotion.

When Facebook first rolled out, before all the cries for privacy, users weren’t at all concerned about what they posts online.  Which eventually led to lost job opportunities. This opened the eyes for many teens, getting ready to graduate and hitting the real world. Some didn’t think it was appropriate for companies to look up their personal activities but with access to public information, companies can do as they pleased. Over the next years, into 2010-2011, Facebook users seemed to get the message and cleaned up their profiles.  They didn’t do it just for job opportunities but also to hide their activities from parents and grandparents who all of a sudden were signing up for the free service in droves.

 Adults have taken over Facebook, with the average age hitting 30+, so the younger generation is doing a much better job of hiding activities from their Facebook profiles by moving away to other platforms that provide better privacy options, while also limiting how much they share with the outside world.  Snapchat and Instagram are the two biggest platforms for the younger generation, that are looking to share photos and texts with their friends without any intrusion from their family. With that said, images, texts and other activities still slip out.  Once that happens, it’s for the entire world to search and find via Google or Bing.  And now Facebook is going to provide even greater opportunity for employers to weed out candidates via Graph Search.  It’s still in Beta, but over time Graph Search will consider every activity on Facebook and make it easier to parse through the data for job candidates. At least that’s what Facebook envisions.

With any new social media website, users have to be wear of their activity.  Social media networks are always looking to make money so they’ll sell data or provide access to services for a fee. In this case, no matter how many privacy options there, teens need to start thinking about the consequences of their social media activities 10-15 years down the road. You may not care about posting something stupid now but years from now, it may catch up and prevent you from getting a job.  And with times as tough as they are, you don’t want to lose an opportunity over a dumb picture you took while out drinking with your buddies.

Have you posted anything you wouldn’t want your employers or colleagues to ever see? Do you think it’s right for employers to judge you based on past activity?

 (pic source)

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