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Published: Thu, August 09, 2018
Economy | By Melissa Porter

Snapchat's new design is driving users away in bunches

Snapchat's new design is driving users away in bunches

Saudi Arabian Prince Alwaleed Bin Talal announced Tuesday he's taken a 2.3% stake in Snap - a deal worth about $250 million.

Snap Inc. reported on Tuesday that its number of daily active users fell by 2% to about 188 million, marking the first time the company has lost daily users since the company was founded in 2011.

Shares in Snap jumped by an initial 11 per cent in after-hours trading last night on the back of the news, but have since sunk to just below its closing price.

However, there was positive news elsewhere in the results as parent company Snap Inc reported revenue of 262.2 million dollars (£202.6m), up 44% on this time previous year and above analyst expectations.

The Venice, California-based company said it had a loss of 27 cents per share.

That's despite a drop in active users-a first for the company. It also reported revenue of $262.3 million, slightly above analyst expectations of $250.4 million.

"We feel that we have now addressed the biggest frustrations we've heard and are eager to make more progress on the tremendous opportunity we now have to show more of the right content to the right people", CEO Evan Spiegel said of the company's subsequent attempts to walk back some of the more unpopular aspects of Snapchat's redesign.

Despite this, it grew average revenue.

"On the positive side, Story Ads transitioned to programmatic (75% of ad revenue now programmatic), Snap Pixel entered general availability, and the self-serve platform saw some updates in the quarter".

A video was attached to the tweet which documented the moment Alwaleed met Snap's chief executive Evan Spiegel two years ago, when Spiegel visited Riyadh alongside the company's chief strategy officer Imran Khan.

Skepticism heading into Snap's better-than-expected results was highlighted by Wall Street's reaction to Snap's five quarterly reports since its March 2017 initial public offering: Shares responded positively only once.

These drops came as the company embarked on a huge redesigned and also committed to building hardware in the form of camera-toting spectacles.

Snapchat users spend 30 minutes per day on average using the app, and generated over 3 billion snaps per day.

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