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What Twitter Can Learn from Snap


Mar. 8 2017, Updated 10:36 a.m. ET

Facebook is already learning from Snap

Twitter (TWTR) has taught one lesson to the newly listed Snap (SNAP). Snap wants to avoid Twitter’s post-IPO troubles that have depressed the stock.

But Twitter can also learn from Snap to jump-start its growth. Facebook (FB) has shown that learning from a junior rival isn’t taboo. Facebook has mimicked several Snap features in Instagram, and those features are helping improve user engagement and investment on Instagram.

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It’s no longer safe to bet on advertising alone

As for Twitter, Snap can teach a lesson in diversification. Snap isn’t staking its future on digital advertising revenue alone. Instead, it’s diversifying into gadgets and has already launched a device called Spectacles, which is a kind of sunglass embedded with cameras.

While Snap isn’t saying that its ambition is to take on GoPro (GPRO), Sony (SNE), and others in the camera hardware business, it is describing itself as a camera company.

Expanding into the gadgets business would not only earn Snap extra revenue outside the advertising business but also ensure that it doesn’t depend on Apple (AAPL) and other smartphone makers for their camera features. Snap subscribers can use Spectacles to capture and share photos and videos on the app without assistance from a third-party gadget. Spectacles could also improve user engagement on Snap, increasing the app’s appeal for advertisers.

Twitter could pursue a similar hardware approach to solve its engagement and revenue growth problems.


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