Market Overview

State Of Social Media: Bright Spots And Blemishes

State Of Social Media: Bright Spots And Blemishes

The social media space had a mixed year, with Facebook Inc (NASDAQ: FB) shares cooling off after a stellar 2015 amid the fake news and ad metrics scandals. Twitter Inc (NYSE: TWTR) found itself in a mess, and Snap Inc., formerly Snapchat, is preparing to offer its shares to the public.

Even amid the social media frenzy, these companies had their share of troubles as well as moments of glory.

Facebook: Caught In Maelstrom Of Everything Fake

Bright Spots

  • Facebook increased focus on existing products such as the Messenger and Instagram. The renewed thrust manifested in the company's efforts to produce a copycat version of Snapchat's hugely popular Stories.
  • Aggressive push into live video.
  • Forecast-beating results in all the quarters for which results were reported during the year, with monthly active users at 1.79 billion at the end of the third quarter.


  • Caught on the wrong foot in its ad metrics calculation.
  • Allegation leveled that fake news circulated through the platform swayed the U.S. presidential election results.
  • Could not bring out any exciting breakthrough products.

Twitter's Cup Of Woes Overflows

Bright Spots

  • Continued possibility of M&A interest.
  • New deals with the NFL to live stream games on Thursday nights and others such as Wimbledon, CBS News, the National Basketball Association, Major League Baseball, the National Hockey League and Pac-12 Networks.
  • President-elect Donald Trump's press secretary designate Sean Spicer recently said Twitter would continue to play a role in his presidency.


  • User growth stagnant.
  • Revenue growth continues to fail to impress the Street.
  • Competition from Facebook, Instagram and Snap intensifying.

Snap Emerges As A Serious Contender

Bright Spots

  • Growing user base: Data from Statista show Snapchat had 150 million daily active users in June 2016, up from 110 million global DAU in December 2015 — a 36 percent growth in six months.
  • In September, the company said it had developed a new type of camera called Spectacles, marking a foray into hardware business.
  • Snapchat's Stories served as an inspiration for Facebook, as its Instagram platform launched its own version of Stories .


  • In December, the Snapchat application encountered issues, causing inconvenience to users.
  • Facebook's blatant copying of Snapchat features could weigh on the performance of latter.
  • Now that the social media platform has opted to offer shares to public, it may be constrained by the requirements to survive and thrive as a public company.

Related Articles (FB + TWTR)

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