When Facebook decides it wants to get into your business, beware.
Snap, the parent company of Snapchat, announced its quarterly earnings today, and they were dire.
The company’s stock plummeted over 17%, or about $2.50, to $12.60 in after-hours trading, after it missed Wall Street’s expectations. Its stock has not traded above its initial public offering price since July 7.
The company’s user growth has been minimal since going public in March, and its revenue is essentially a rounding error when compared to Facebook’s: Snap generated $208 million for the quarter, whereas Facebook posted $10.3 billion.
Facebook attempted to buy Snapchat for $3 billion in 2013, but was rebuffed by founder and CEO Evan Spiegel who seemed to believe that he could build a business the could compete toe-to-toe with the blue giant. In the intervening years, Facebook has tried time and again to mimic multiple functions of Snapchat’s in standalone apps, but never found much success. That was, until it outright copied Snapchat’s Stories structure for its own apps.
Last year, Facebook put out a near-identical feature, allowing users to post short videos or images with filters and geolocations to their friends, or on their social networks that disappear after 24 hours, into Instagram, WhatsApp, Facebook Messenger, and Facebook itself. Instagram’s version now has over 300 million daily users, nearly double the 178 million users Snapchat has in its entire app.
Since Facebook copied Snapchat, it’s gone public and has lost roughly $3.1 billion through the first three quarters of the year—more than Facebook wanted to buy it for four years ago. It’s just further proof from Facebook that you don’t need an original idea to be wildly successful, and that having the best idea doesn’t mean as much as having the largest network.