Snap shares in free-fall as users snub redesign

Sean Reid
May 2, 2018

The redesign was supposed to attract new users amid concerns of lackluster audience growth.

Daily active users were up 15% year-over-year, from 161 million to 191 million, but just 2% since last quarter, when that number was 187 million.

The revamp of its app, unveiled late a year ago, was widely met with a negative response by users, and share prices were sent tumbling when reality star Kylie Jenner voice her disapproval of the new look and layout.

By comparison, Facebook said Tuesday that WhatsApp's Snapchat clone now has 450 million daily users.

The stock got clobbered in after-hours trading, falling as much as 17%.

And things won't exactly look up in Q2: Snap noted that year-over-year revenue growth rate would "decelerate substantially" next quarter.

"Our redesign created some headwinds in our revenue this quarter by disrupting user behavior and creating some apprehension among our advertising partners", Snap CEO Evan Spiegel said in prepared remarks.

People familiar with the test told the publication that the move is an attempt to see how many ads users will tolerate. Celebrities like Kylie Jenner have publicly tweeted about disliking the redesign, causing Snap's stock to plummet 6.1% in a single day.

The update, which rolled out to most users during the first quarter, was meant to make the interface less confusing. And after months of standing by the changes, the company last month was forced to backtrack, promising to redesign the redesign. Chrissy Teigen, a model and TV personality, said she stopped using the service in March.

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