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In the memo dated Sept. 26, Spiegel admitted that Snapchat had
"rushed redesign, solving one problem but creating many others,”
Cheddar reported.
Spiegel said the company would aim to reach the profit goal by
attracting older users through revamped marketing, increase
active advertisers and better serve emerging markets users with
its forthcoming redesign of its Android app, according to a copy
of the memo posted by Cheddar.
Snap did not immediately reply to a request seeking comment.
There was no mention of any cost-cutting measures that could
help the company achieve its profitability goal.
The company has shifted over the last year to primarily selling
ads through self-service, automated auctions rather than direct
sales. That has come at the cost of the premium feel Snap had
tried to ascribe to its ads, but gave overall sales a jolt by
attracting more advertisers.
In September, Neil Campling, co-head of global thematic group,
Mirabaud Securities had said the initial plan to reach
profitability by the end of this year looked like a long way
off.
Daily Snapchat users fell to 188 million in the second quarter
in August from 191 million last year for the first time. Snap
had never before logged a quarterly drop in daily users,
according to data it released going back to 2014.
In August, Snap executives had told analysts that the redesign
was the primary reason for usage slipping and that a European
Union data protection law that spurred changes to user privacy
terms had no material effect.
Snap shares are down more than 40 percent since it reported its
second-quarter results and closed on Thursday at $7.80. Shares
rose 3.2 percent after hours following the Cheddar report.
(Reporting by Mekhla Raina in Bengaluru; editing by Diane Craft)
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