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Snap’s Focus on Stories Should Disappear

Jan. 30, 2018 1:02 PM PT

For all of Snap’s focus on being a broadcasting service for millennials who share content with larger groups, what’s become clear is the app’s main usage remains where it started: messaging. But that’s not where it is making money.

Instead it makes much of its ad revenue from users’ Stories, where people post picture and video updates to their followers. The problem is that this part of the app isn’t growing. Long term, Snap needs to figure out a way to make money through the narrow scope of person-to-person messaging. It may be time for Snap to stop investing in Stories.

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This next stretch for the company could be its most difficult if it tries to build a large messenger business where none of its competitors have succeeded. For a company that has built a reputation as having the industry’s most creative product designers, the real test may be if they can succeed in creating a business where so many others have failed.