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Snapchat Preps $25 Billion IPO – MediaPost Communications

Snap, Inc. is reportedly preparing an IPO that will value the company formerly known as Snapchat, at around $ 25 billion.

The social darling is shooting for a March offering, The Wall Street Journal reports, citing sources. A company representative declined to comment on the report, on Thursday. 

Standing in stark contrast to struggling social networks like Twitter, Snapchat is presently making more money than it can count.

Indeed, despite direct competition from Facebook and other tech giants, the company is positioned for “explosive” growth in ad revenue over the next few years, according to a recent forecast from eMarketer.

The research predicts that the playful messaging app will generate $ 366.69 million in ad revenues this year.

That figure is expected to jump to $ 935.46 million, next year.

Cathy Boyle, principal analyst at eMarketer, recently said Snapchat’s bright outlook has everything to do with its young user base. “Advertisers are attracted to Snapchat for its broad reach among young Millennials and those in Generation Z, which are valuable demographic groups for many businesses,” Boyle notes in a new report.

To its credit, Snapchat has also tailored its ad strategy specifically for this easy-to-alienate demographic.

“To engage those often hard-to-reach consumers, Snapchat has expanded its advertising portfolio over the past year to include a wider array of video ads and more sponsored geo-filters and sponsored lenses,” according to Boyle.

Stateside, Snapchat’s Discover feature generates 43% of ad revenue, which is its largest single share, according to eMarketer.

Next year, however, the research firm expects Stories to overtakes Discover as the dominant ad revenue source — by generating 37.8% of the company’s domestic ad revenue.

Having launched its ad platform in mid-2015, Snapchat still only captures 2.3% of social-networking dollars, eMarketer estimates. That’s despite the fact that it now commands 36% of the market in terms of domestic users. 

Approaching its would-be IPO, Snapchat continues to experiment with new categories.

Bounding into hardware and physical fashion, the company recently unveiled Spectacles — stylish video-recording sunglasses that are expected to retail for $ 130.

Set to hit shelves later this fall, the shades can record 10-second video snippets, which are designed to approximate one’s natural field of vision. That’s thanks to a 115-degree lens, which records circular video. If Spectacles are well received, Snapchat would become the first company to convince consumers to wear connected gadgets on their face.

Google notoriously spent millions of dollars in development and marketing dollars, before giving up on its Glass initiative. Yet Snapchat — which just rebranded itself as Snap, Inc. — seems to have learned a few things from Google’s failure.

Spectacles’ $ 130 price tag is far more reasonable than the $ 1,500 that Google tried to charge people for Glass. Snapchat’s glasses are also being sold as a single-purpose device, which is historically much easier to market.

like Google, Snapchat currently enjoys a strong bond with young consumers — the ideal demographic for starting trends and popularizing products.

Although bold, Snapchat’s move into hardware should not come as a complete surprise to industry watchers. The social darling recently joined the industry group that runs the Bluetooth wireless standard, which followed several hires and smallish acquisitions in the arena of consumer electronic


Business – Google News

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