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Why Snap Is Putting a Lid on Costs

In the summer of 2016, a team of Snap engineers began building a feature known as Snap Map, which would display people’s locations and publicly posted stories on a map. Then, a month before its release to the public last June, Snap acquired Zenly, a French company that had a similar mapping product.

The news took many people who worked on Snap Map by surprise. Snap’s product was finished and there was little that Zenly’s tech added, according to three people with direct knowledge of the feature. Yet Snap paid $196 million for Zenly, almost entirely in cash.

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Then again, the best remedy to ward off cash problems is to grow the business. Snap’s progress in doing so will be what analysts are watching for on Nov. 7 when Snap releases its third-quarter earnings.

—Amir Efrati contributed to this article.

Robert Cathey and Matt Knox commented on this article.
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