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Comment by adamnemecek | Hacker News Reader

I think that part of the reason twitter is doing the way it's doing is the less than stellar user engagement. AFAIK snapchat is killing it on that front. Idk if that justifies the valuation but I do see the general public a lot more pumped about it than I've ever seen people pumped about Twitter (ymmv).

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From what I've heard, if you are 13-25 with a smartphone, there's a good chance your primary source of communication is snapchat. And unlike other platforms (WeChat, WhatsApp), snapchat has a content delivery mechanism. So not only do friends connect with friends, but they also connect with businesses, celebrities etc.

Twitter was never about fast communication between two people, no one every said "Let's see if Mike wants to join us for dinner, I'll just Twitter DM him". Whereas WeChat, Viber, Whatsapp allows you to communicate quickly, there's no connection to advertisers (from what I know). Therefore snapchat is valued so highly because it does what twitter and Whatsapp et al couldn't do.

Your understanding of WeChat is not very accurate. It's on a completely different level of integration with daily life than Facebook, Instagram, Snapchat, or anything else. It doesn't really do ads because companies run their shop on WeChat. It has a payment system, it lets you book and pay for taxis, order lunch, etc. In comparison, Snapchat is hot air.

Hmm I didn't know that about WeChat. I've never used it, thanks for the clarification.

User engagement doesn't pay the bills.

With enough ads, it does.

(And you can also try and leverage it to get VCs to pay your bills.)

With enough ads user engagement also goes down. If Snapchat pushes it too far it will drive users off the platform and onto the next "cool" thing.

I think that to some extent decrease in engagement due to ads is a constant. Some engagements are larger than others and can handle that decrease.

As it stands now, you need to actively choose to play an ad, and that's how the impression is made. This is why Snapchat commands a higher CPM, because the user is actively in front of the screen.

However, I never look at the ads and instead stick to my friend's user generated content. Once ads are forced on users, they will jump ship.

Have you used snapchat? Swipe left from the main screen and I'm shown 4-5 advertisements right away. User engagement + advertisements = bills paid.

Users' appetite for more ads will, in 100% of cases, diminish before shareholder appetite does.

spoken like someone who hasn't used the product. snapchat's ads fit the format amazingly well, and now that snapchat is also paying for content directly everyone's incentives are aligned to make a deeply engaging product that monetizes well without alienating users.

I have. I'm saying that especially when public, there is no such thing as enough profitability. There's no number of ads that will satisfy shareholder demands. They'll have to squeeze more and more and the only possible signal that "more" has become "too much" is necessarily when users start walking away from the service.

It's not necessarily just ads. There's content. Aston Kutcher in a recent podcast talked about "vertical video" meaning people develop content specifically aimed at mobile users watching on a portrait phone. Snapchat is primed to deliver that content. Saying that there are not enough ads is like saying YouTube was a terrible buy for Google.

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