How 1 Tweet From Kylie Jenner Caused Snap, Inc. To Lose $1 Billion
ARI SHAPIRO, HOST:
Now we're going to talk about a tweet worth more than a billion dollars. It came from Kylie Jenner, reality TV star and member of the Kardashian family. Quote, "so does anyone else not open Snapchat anymore? Or is it just me? Ugh, this is so sad." With that, the company Snap $1.3 billion of its stock market value - more than 6 percent. It has recovered a bit. Ten minutes later, Kylie Jenner tweeted (reading) still love you, though, Snap. My first love.
Small consolation. This actually points to some important currents in the tech industry. And to talk about them, Will Oremus of Slate joins us now. Hi there.
WILL OREMUS: Hi, Ari.
SHAPIRO: Let's work backwards. What was it about Snap that made Kylie Jenner so annoyed?
OREMUS: Well, we have to infer that a little bit, but the reason that most people are annoyed with Snapchat right now is that they recently rolled out a big redesign of their app. And the goal of this redesign, among other things, was to try to finally lure in users who are older than, say, 30, 35 years old, which is something they've always had trouble doing. But the problem is the people who loved it in the first place are finding it really hard to use and apparently especially if you have a lot of friends on Snapchat. I wouldn't know about that from personal experience, but I've heard tale that it's become very confusing to try to interact with your friends on a regular basis, which, of course, is what teens and a lot of young people use it for.
SHAPIRO: People generally hate redesigns. In this case, more than a million people signed a change.org petition saying they hated Snap's redesign. Tell us about the larger tech competition that this redesign was a response to.
OREMUS: Yeah, and you raise a good point. I mean, redesigns are always unpopular with some people, and then the question is how many people hate it and will they come around eventually? But there is a worrying backdrop for this if you're Snapchat, and that is the fact that Instagram, which is owned by Facebook, copied its most popular feature, the stories feature where you can share these sort of video compilations with your friends, and has been luring people away from Snapchat. So celebrities and influencers and also just regular users are spending on the whole more time now on Instagram and less time on Snapchat. That's seen as an existential threat to Snapchat's business.
SHAPIRO: Snap was one of the most hotly anticipated tech IPOs when it went public close to a year ago. Is it now fighting for its life?
OREMUS: That might be a little strong. I mean, it's - there's an expectation when a company like Snap goes public that investors are going to be on this rocket ride of growth for a while. That's why they're buying in even though the company isn't really making money at the time. Well, fast-forward a few quarters, Snapchat still isn't making money, but the bigger problem is they're not growing. It doesn't mean that they're about to go away, doesn't mean everybody is leaving Snapchat. But the concern is if it doesn't have that momentum anymore, at any given point, there could be this sort of inflection, and all of a sudden, it's not cool anymore. And then you see an exodus that reminds everyone of what happened to MySpace back when Facebook took over. That's why a tweet like Kylie Jenner's can cause such a little panic because, really, the question of whether Snapchat is cool is at the core of its value proposition.
SHAPIRO: We learned yesterday that the Snap CEO Evan Spiegel is paid nearly $638 million. That's thought to be the third-highest annual salary ever for a CEO. Has he earned it?
OREMUS: (Laughter) Spiegel is coming under more pressure. I mean, he is really - according to a lot of accounts, he's really the mind that drives this company. He has a hard time delegating. It's really his vision that drives the product changes in the app. And recently, those haven't been very successful. I think we will start to see more pressure on Spiegel to relinquish some control in one way or another.
SHAPIRO: Will Oremus is a senior tech writer for Slate. Thanks so much for joining us.
OREMUS: Thanks for having me. Transcript provided by NPR, Copyright NPR.