Snapchat continued to shrink in Q3 2018 but its business is steadily improving. Snapchat’s daily active user count dropped again, this time by 1 percent to 186 million, down from 188M and a negative 1.5 percent growth rate in Q2. User count is still up 5 percent year-over-year, though. Snapchat earned $298 million in revenue with an EPS loss of $0.12, beating Wall Street’s expectations of $283 million in revenue and EPS loss of $0.14, plus a loss of a half a million users.
Snap entered earnings with a $6.99 share price, close to its $6.46 all-time low and way down from its $24 IPO opening price. Snap lost $325 million this quarter compared to $353 million in Q2, so it’s making some progress with its cost cutting. That briefly emboldened Wall Street, which pushed the share price up 8.3 percent to around $7.57 right after earnings were announced.
But then Snap’s share price came crashing down to -9.3 percent to $6.31 in after-hours trading. The stock had been so heavily shorted by investors that it only needed modest growth in its business for shares to perk up, but the fear that Snap might shrink into nothing has investors weary. Projections that Snap will lose users again next quarter further scared off investors.
Worringly, Snapchat’s average revenue per user dropped 12.5 percent in the developing world this quarter. But strong gains in the US and Europe markets grew global ARPU by 14 percent. Snap projects $355 million to $380 million in holiday Q4 revenue, in line with analyst estimates.
In his prepared remarks, CEO Evan Spiegel admitted that “While we have incredible reach among our core demographic of 13- to 34-year-olds in the US and Europe, there are billions of people worldwide who do not yet use Snapchat.” He explained that the 2 million user loss was mostly on Android where Snapchat doesn’t run as well as on iOS. Noticibly absent was an update on monthly active users in the US and Canada. Snap said that was over 100 million monthly users last quarter, probably in an effort to distract from the daily user shrinkage. The company didn’t update that stat, but did say the “over 100 million” stat was still accurate.
Spiegel had said in a memo that his stretch goal was break-even this year and full-year profitability in 2019. But CFO Tim Stone said that “Looking forward to 2019, our internal stretch output goal will be an acceleration of revenue growth and full year free cash flow and profitability. Bear in mind that an internal stretch goal is not a forecast, and it’s not guidance.”
During the call, Spiegel responded to questions about the Android overhaul’s schedule saying, “Quality takes time. We’re going wait until we get it right”. But analysts piled on with inquiries about how Snap would turn things around in 2019. He admitted Snaps created per day had dropped from 3.5 billion to 3 billion per day, but tried to reassure investors by saying over 60% of our users are still creating snaps every day.
Spiegel said that expanding beyond the 13 to 34-year-old age group in the US and Europe, plus scoring more users in the developing world via the improved Android app would be how it restores momentum. But the problem is that courting older users could sour the perception of its younger users who don’t want their parents, teachers, or bosses on the app.
Now down to $1.4 billion in cash and securities, Snap will need to start reaching more of those international users or improving monetization of those it still has to keep afloat without outside capital.
An Uphill Battle
Q3 saw Snapchat’s launch its first in-house augmented reality Snappable games, while plans for an third-party gaming platform leak. The Snappable Tic-Tac-Toe game saw 80 million unique users, suggesting gaming could be the right direction for Snap to move towards.
It launched Lens Explorer to draw more attention to developer and creator-built augmented reality experiences, plus its Storyteller program to connect social media stars to brands to earn sponsorship money. It also shut down its Venmo-like Snapcash feature. But the biggest news came from its Q2 earnings report where it announced it’d lost 3 million users. That scored it a short-lived stock price pop, but competition and user shrinkage has pushed Snap’s shares to new lows.
Snapchat is depending on the Project Mushroom engineering overhaul of its Android app to speed up performance, and thereby accelerate user growth and retention. Snap neglected the developing world’s Android market for years as it focused on iPhone-toting US teens. Given Snapchat is all about quick videos, slow load times made it nearly unusable, especially in markets with slower network connections and older phones.
Looking at the competitive landscape, WhatsApp’s Snapchat Stories clone Status has grown to 450 million daily users while Instagram Stories has reached 400 million dailies — much of that coming in the developing world, thereby blocking Snap’s growth abroad as I predicted when Insta Stories launched.. Snap Map hasn’t become ubiquitous, Snap’s Original Shows still aren’t premium enough to drag in tons of new users, Discover is a clickbait-overloaded mess, and Instagram has already copied the best parts of its ephemeral messaging. Snap could be vulnerable in the developing world if WhatsApp similarly copies its disappearing chats.
At this rate, Snap will run out of money before it’s projected to become profitable in 2020 or 2021. That means the company will likely need to sell new shares in exchange for outside investment or get acquired to survive.
India’s Uolo raises $22.5M to bring edtech to the masses • TechCrunch
Uolo, an Indian edtech platform that works with private K-12 schools to offer online learning programs to middle and low-income families, has raised $22.5 million in a funding round led by UAE-headquartered VC fund Winter Capital.
The vast majority of edtech startups operate in a business-to-consumer model and spend on ads to reach the parents and guardians of the students.
Uolo says it is reducing that cost by operating in a business-to-business-to-consumer model, working with private schools to let them offer online learning programs to their students and levy the charges as part of the school fees. The startup’s programs are also designed in tandem with the curricula of the partnered schools, making it easier for students to double down on learning the same lessons.
The Gurugram-based startup develops and provides tailor-made learning programs in coding and English speaking. Students can access these programs on their parents’ smartphones.
“We take edtech to the masses of India. And when we do that, the idea is that you make it cheap enough, affordable enough for people to be able to take it for their children,” said Pallav Pandey, chief executive of Uolo, in an interview with TechCrunch.
He said that the startup is able to provide its offerings to students at much more affordable prices.
Schools tying up with Uolo get an ERP platform called the Uolo School Platform for free. It works as a unified platform where schools can access fee management, report card management and attendance management on a single dashboard.
The ERP platform functions as an entry gate for Uolo as it allows the startup to create an ecosystem once schools start using it. This encourages parents or guardians to use the app to receive communications directly from schools — instead of using typical communication channels such as WhatsApp groups.
“What we have been able to do is get schools and students on one end of the platform, so now we need to get digital learning to flow through us,” Pandey said.
Founded in September 2020 by Pandey and his brother Ankur, Uolo has partnered with more than 8,500 schools across India and currently reaches 3.7 million students.
The $22.5 million funding has come through an equity-debt mix Series A round, seeing participation from Uolo’s existing investors Blume Ventures and new Dubai-based fund Morphosis Venture Capital — alongside Winter Capital. Although exact details of the equity and debt percentage involved were not disclosed, Pandey told TechCrunch that the debt element was in the form of optionally convertible debentures that would convert into equity over time.
The startup, which employs about 350 individuals, plans to utilize the investment to widen its reach to 50,000 schools across India over the next four years and expand its learning programs with courses across STEAM subjects in the coming months. For the latter part, it is looking to partner with education companies as well as people and entities developing high-quality content.
“The first wave of edtech companies in India have proven consumer interest in online education. However, they lacked a cost-effective distribution. We believe that there will be a new generation of edtech companies capable of building organic, low-cost distribution, allowing students to study at $10 per year rather than $10 per hour. Our investment in Uolo is based on our confidence in this type of company,” said Anton Farlenkov, Managing Director of Winter Capital, in a prepared statement.
Oh no, they added NFTs to Winamp • TechCrunch
Winamp version 5.9.1 is here, rejoice! The venerable — nay, aged — but reliable media player has been receiving sporadic updates over the last couple decades, but little truly new functionality has appeared (and that’s just fine by us users). But this new version brings an unexpected and thankfully optional feature: NFT playback.
No, this doesn’t just read out the current valuation of your various square avatars; NFT-type tech has been applied to music as well, offering the capability of limited releases of digital tracks the way you might have a limited vinyl run. At least that’s the idea — I don’t think it’s quite caught on, and with the cryptocurrency world currently in disarray, it’s hard to blame anyone for declining to take part in a potentially risky ecosystem.
“Winamp was a key part of the first digital music innovation, when mp3s changed the way we listen and enjoy music. Now we’re supporting the leading edge of the next one, as more and more artists explore web3 and its potential,” said Winamp CEO Alexandre Saboundjian in a press release.
As you may recall, Winamp was purchased by Radionomy in 2014, and in 2018 a new effort was announced to revivify the brand. The idea, Saboundjian told me at the time, was to act as a unifying layer for all the music services out there, so whether you use Apple Music or Spotify or Tidal or all three, you can just open Winamp and select a track or playlist. It opens up in a different interface, though.
That unified experience hasn’t exactly come to pass. In fact the redone app still counts an equalizer among its “coming soon” features. So it’s a little odd to hear that a functioning NFT layer arrived first:
Winamp’s latest version lets music fans link their Metamask wallet via Brave, Chrome, or Firefox to Winamp. It then connects their favorite music NFTs to their tried-and-true player. Winamp supports audio and video files distributed under both the ERC-721and ERC-1155 standards, and is launching this new feature for Ethereum and Polygon/Matic protocols.
To be clear, the fabled new unified player still seems to be a distant prospect. It’s the original, old-school player that’s getting the new feature, alongside a boatload of bug fixes and optimizations. The changes are listed, as they pretty much always have been, in a post on the Winamp forum, followed by ardent thanks from the community and obscure bug reports.
I for one am grateful that this piece of software is still actively maintained. I won’t be using the NFT function, but it’s just one of many things added in 5.9.1, and as soon as the rest of the Winamp users (there are dozens of us!) get around to testing it for me, I’ll go ahead and download it. After all, it really still whips the llama’s ass.
6 extremely online books to gift your most internet-obsessed friends • TechCrunch
I like the internet. There, I said it. I spend my entire day writing about the internet, and then in my leisure time, I read books about how the internet shapes our lives. I might have a work-life balance problem, but I can’t help it. I mean, music journalists still listen to music, right? Chefs still cook at home? So I can enjoy some critical thinking about the internet in my spare time, as a treat. After all, internet culture is just flat out culture at this point, and hey, who doesn’t consume culture?
Should I go outside and touch grass? Probably! But I can touch grass while reading a book, duh. Plus, I’m pretty sure that none of these books mention Elon Musk, so if that’s not a sell for you in this day in age, I don’t know what is.
This article contains links to affiliate partners where available. When you buy through these links, TechCrunch may earn an affiliate commission.
“README.txt” by Chelsea Manning
“The free internet at Barnes & Noble is… not fast,” begins Chelsea Manning’s memoir. In the midst of a snowstorm in early 2010, Manning sent over 700,000 classified and sensitive documents to WikiLeaks that she smuggled off of U.S. Army computers while serving as an intelligence analyst. Of course, this is a story we already know, since it’s been in and out of the news for the last twelve years: Manning’s leaks revealed the true nature of U.S. military action in Iraq and Afghanistan.
Manning’s book lets us hear her side of the story: how homophobia and abuse in her childhood home drove her to join the army in the first place; the pain she endured while serving in the army as a then-closeted transgender woman in the era of Don’t Ask Don’t Tell; and how she risked her life to share information that she believed the public desperately needed to access.
Manning’s life is far from ordinary — she’s a famous, highly controversial whistleblower who spent 7 years in prison and publicly transitioned while in custody. But the internet is a surprisingly ordinary through-line in her story (she even describes herself as “extremely online” in the book). Like so many queer people, Manning found solace and community on the internet, where anonymity helped her explore her identity when it wasn’t safe (or legal, in the case of the military at the time) to be herself IRL.
Price: $19 from Amazon
“Everything I Need I Get From You” by Kaitlyn Tiffany
I was never a One Direction stan, but as someone who simply existed on the internet in the early 2010s, I sure felt the influence of those five British boys. No one could escape One Direction at the height of their popularity, and as Kaitlyn Tiffany argues in “Everything I Need I Get From You,” this wasn’t just an era of silly girls screaming their heads off because Harry Styles is cute. As they forged community and manipulated chart numbers together, One Direction fans made it abundantly clear that nothing is more powerful than a highly-coordinated campaign of teenage fans with internet access. Remember when K Pop fans pranked a Tulsa Trump rally with thousands of false registrations? Or just weeks ago, when Taylor Swift fans directed politicians’ attention to the potential antitrust problems at Ticketmaster? Fan culture is ubiquitous on the internet and shapes how we use it — if you disagree, you’re not looking hard enough.
One Direction fandom wasn’t all sunshine and rainbows, though. Tiffany writes about the sinister undercurrents of some fandom spaces, including the conspiracy theory of Larry Stylinson, which claims that Harry Styles and Louis Tomlinson were secretly in love but barred by their management from going public. Proponents of this theory crossed… several lines, and Tiffany points out how the way they spread the theory — like convincing each other that the media is spreading fake news to cover up the truth of the affair — mirrors the way that more dire political conspiracies take root. Yikes.
Even if you were never a “directioner,” this book is a deeply engaging read. And, I’m sorry, but is there any song ever written that’s catchier than “What Makes You Beautiful”? You don’t know-oh-oh!
Price: $17 from Bookshop.org
“Monster Kids: How Pokémon Taught a Generation to Catch Them All” by Daniel Dockery
I love Pokémon almost as much as I love the internet. So, naturally, I was delighted to get my hands on a copy of Daniel Dockery’s nonfiction book “Monster Kids,” which chronicles the phenomenon surrounding Pokémon (and by extension, the “monster collecting” genre of media).
While reading “Monster Kids,” I found myself live-texting my friends fun facts that I never knew about Pokémon. My personal favorite bit of trivia is that the Pokémon franchise was initially struggling to catch on in the West, so in an elaborate marketing stunt, Nintendo held an event in Topeka, Kansas called… ToPikachu. At the event, 700 Pikachu plushes were dropped from the air, but that wasn’t all — ten skydivers also descended from an aircraft, then hopped into Pikachu-branded cars and drove away, oozing with style.
This book is full of jaw-dropping anecdotes about the early days of the Pokémon franchise (come on… Topikachu!?), but Dockery unifies these stories to comprehensively explain how the exceptionally-mega-popular video game franchise got to where it is today. And where is it today? Still as mega-popular as ever, and with the same amount of glitches. You still can’t find a Mew under the truck, though.
Price: $16 from Amazon
“She Memes Well” by Quinta Brunson
If you’re not watching “Abbott Elementary,” what are you doing? But before she was the star and showrunner of the ABC sitcom, Quinta Brunson was a meme.
Well, she was more than that. She was a writer and comedian trying to make it in a cut-throat LA industry. But she got her big break when she started posting a series of clips as “the girl who’s never been on a nice date,” playing a character who’s flattered by men doing the bare minimum. Remember “he got money?” That girl is now an Emmy winner.
“She Memes Well” is a series of comedic, yet emotional essays that chart Brunson’s rising star — she writes about her (good and less-good) experiences in the Philly public school system, failed relationships, learning to cook, you name it. Like “Abbott Elementary,” Brunson’s essays are laugh-out-loud funny, yet they also illuminate the systemic barriers that she had to face to become a Philly kid with an Emmy. Go Quinta, and go birds!
Price: $14 from Harper Collins
“How Sex Changed the Internet and the Internet Changed Sex” by Samantha Cole
We’re not kidding when we say that sex is what powers innovation on the internet. VICE writer Samantha Cole’s new nonfiction book is proof of that: do you know what a Playboy centerfold and the creation of the JPEG have in common?
I read a galley of Cole’s book while preparing to interview the CEO of OnlyFans at TechCrunch Disrupt. It was a good way to brush up on legal issues impacting sex on the internet, like Section 230 and SESTA/FOSTA — but more than anything, it was just a really interesting read that gave me a much deeper appreciation for the history of the internet and sex. I learned about the stories of internet pioneers like Jennifer Ringley, who’s regarded as either a conceptual artist or the first camgirl, depending on who you ask. Ringley wrote a script that took photos through a webcam in her college dorm and posted them online — this started in 1996, far before streaming live video would have been an option. Ringley didn’t censor private moments in her life, but it wasn’t necessarily a sexual project: just a person living her life. Yet after seven years of meticulously documenting her life, Ringley shut down JenniCam after PayPal updated its guidelines to prohibit nudity.
Ringley’s story is just one fascinating internet artifact retold in Cole’s book. As the title of the book suggests… turns out that sex changed the internet!
Price: $30 from Amazon
“Because Internet” by Gretchen McCulloch
As we watch Twitter fall apart in slow motion, I’m thinking of something I learned in “Because Internet”: linguistic researchers love Twitter! Think about it. How often have we had real-time access to data about how people from all around the world talk and type?
“Because Internet” is a geeky, nerdy academic book, but McCulloch writes in such an entertaining, approachable way that it makes me wish I had taken a linguistics class in college. Then again, your typical intro linguistics class probably doesn’t interrogate the language of memes and the punctuation of texts so seriously. But if you have a friend who is constantly inventing new forms of punctuation to denote sarcasm, this book is a must-gift.
Price: $16 from Bookshop.org
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