Still hasn’t disappeared!
The messaging app is raising $650 million from investors, including Alibaba. The fundraising round is a sign that investors believe founder Evan Spiegel, a 24-year-old dudebro who may or may not have dated Taylor Swift, knows exactly what he’s doing. Snapchat now has 100 million users, and claims that its U.S. devotees watch more than 2 billion videos a day. (That’s half as many as Facebook, but Snapchat is still young.) While the company is talked about as the potential future of communication, Spiegel’s plan to make money is decidedly banal: advertising. It’s experimenting with inserting 10-second video ads for brands like Coca-Cola and Samsung into feeds. Media companies are also eager to get on Snapchat to reach the much coveted teen demographic. CNN and People magazine, for example, publish videos and articles through Snapchat. Even Fortune is excited, offering tantalizing glimpses into office life at a business publication to the delight of teens nowhere. Snapchat, then, is more than a messaging service; it’s a content-delivery one, too. And so long as media companies and advertisers remain petrified about their relevance with teens, money will keep coming Spiegel’s way. Until those teens grow up.
Better pick up the pace
Fitbit, which makes a high-tech wristband for people who want to show off how serious about fitness they are, has been accused by its competitor of “systematically plundering” confidential information. Jawbone filed a lawsuit against Fitbit this week, claiming the firm has poached employees who then “absconded with reams” of proprietary information about Jawbone’s current and future plans. The lawsuit has not been tested in court, but it comes at a bad time for Fitbit, just as it’s gearing up for a $100-million IPO. In court filings, Jawbone claims Fitbit contacted nearly one-third of its employees this year, some of whom took the company up on its offer. Jawbone accuses one employee of sending confidential information to Fitbit multiple times using his personal email account, and another of downloading the company’s “playbook.” Fitbit said in a statement that it has “no need to take information from Jawbone or any other company.” Indeed, Fitbit made $132 million in profit last year. Jawbone has existed for 16 years and is still not profitable. Of course, none of this really matters. The fitness tracker market is set to decline as smartwatches offer consumers more functionality. While Fitbit and Jawbone slug it out in court, Apple and Samsung can steal market share. Enjoy your Pyrrhic victory, guys!