Snap’s disappearing executives problem
According to a report from Recode, at least ten Snap executives who reported directly to chief executive Evan Spiegel have left the company in the past 18 months. The count excludes other senior employees who have departed from the company in recent months.
Executives have left Snap for a variety of reasons including some being ousted following a probe into their conduct, as the Wall Street Journal reported, and at least one resigning because of disagreement with the management over salary and promotion, as Bloomberg reported.
Snap outpaced rivals in revenue growth
Snap generated $298 million in revenue in the third quarter of 2018, representing an increase of 43% YoY. Industry peers Facebook (FB), Twitter (TWTR), Alphabet (GOOGL), and Yelp (YELP) grew their revenues by 33%, 29%, 21%, and 8.0% YoY, respectively, in the third quarter.
While Snap has been growing its revenue faster than its main industry peers, it’s currently a small business. Its $298 million revenue in the third quarter compared to Facebook’s $13.7 billion revenue and Alphabet’s $33.7 billion revenue in the same period. Twitter generated $758 million in revenue in the third quarter.
Snap makes money from advertising
Snap generates the vast majority of its revenue from advertising. The company sells ad spots in its photo-sharing app Snapchat, which had 186 million daily active users at the end of the third quarter. Snap’s Snapchat is popular with teen users, making it an ideal advertising platform for businesses seeking to connect with a younger audience.