Snapchat CEO predicts Facebook will implode like Yahoo

I don't know whether I believe it, but the argument for Snapchat is that it encourages user engagement. So if you're a photographer who wants attention, it's better to have someone's dedicated attention for a few seconds on Snapchat than it is for them to glance it while scrolling through their feed on Facebook.

That doesn't mean it's going to implode. Zuckerburg is a ruthless and savvy businessman, with many more years of experience compared to Spiegel. There are a lot of people who are not as savvy as us and Facebook will continue to derive profits from those people.

Snapchat has a very high user engagement but only across a very specific demographic. Even my 80 year old mother uses Facebook, I strongly doubt she would would ever have any interest in Snapchat.

Spiegel would do well to take a few pages out of the elephant's book and put them to use: he's assuming that his own demographic is the only one that exists. The kid has hit a profit mine and now thinks he can predict the future - user engagement is not everything, user retainment counts for something too.

Edit: Thanks.

This was very common in the last dot-com boom. That time, Yahoo was the beneficiary of the funds. People were blindly throwing money at "internet advertising", without any clue as to whether they were getting any value or not. And VC-backed companies were doing even more so (and buying shitty Superbowl ads....)

As you mention, Snapchat has no way of measuring their own LTV. If they were to do any Facebook advertising, they'd just be shooting in the dark.

So it's not completely blind, but I suspect many companies are paying for "brand awareness" and "user engagement" - the things they can measure, like the drunk looking for his keys under the streetlight - and maybe haven't fully validated that those translate into real revenue.

So long as Facebook are reasonably astute they have enough assets that they can just buy any competitor that looks promising. Their real challenge isn't remaining relevant to the market themselves any more; it's making sure they're quick enough to buy enough innovative startups so that Google/Apple/etc can't gain too much of the ad market and managing the process of integrating those startups in to the Facebook platform seamlessly.

The use cases and the biz cases for buying/using a rift is imho not yet a given.

Yahoo tried it with their Tumblr acquisition (and others), but they seem to buy companies at their peak, rather during their early growth stages.

I'm not sure how FB is run internally, but what I know doesn't fill me with confidence. It feels like a bunch of 20 somethings acting as arrogant as possible because of their defacto monopoly on personal social networking. I honestly can't see this culture being good for a hardware company that's expected to continue to be an open source darling and actually ship hardware. Where's FB's track record in hardware? A couple failed phones at best?

Heck, /r/oculus used to this avalanche of futurism and wonderful projects. Now it reads like a lot of press, marketing, and PR pieces. I suspect a lot of the hobbyist goodwill has been burned by the acquisition or just naturally petered out and the interesting people have moved to better things.

Not to mention Sony and MS getting in on the action. Sony has Morpheus and MS is showcasing their VR headset in June. These are devices that'll "just work" with a commodity console as opposed to a specialist device that'll "just not work" without a hefty and expensive gaming machine and an end user without enough tech skills to tie all these disparate elements together.

I think FB smelled blood in the water with Sony and MS eating Oculus's lunch and got them at a very discounted price. Everyone thinks this is some masterful move, but it seems like desperation from all involved. The console juggernauts are just not easy to beat. If they were we'd all be playing iConsole or Facebook's console or the Ouya. Sony and MS have the hardware, the delivery back-end, the online stores, the customers, the exclusive deals, the experience, the branding, and the marketing muscle. What is FB bringing to the table other than cash from its inflated stock?