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Snapchat's (SNAP) Zenly Buyout Inspires Snap Map Feature

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Snap Inc (SNAP - Free Report) unveiled Snap Map, it latest feature that will help a user find friends by sharing his/her location on a map. Moreover, an ActionMoji will appear on the map once the user’s friends share their location. This will be visible only when the user opens his/her Snapchat account, adds the company's blog post.

Per TechCrunch, Snap’s latest feature is based on its recent acquisition, Zenly, a French social map app. Snap is said to have shelled out $250 million to $350 million for Zenly, though there has been no official word on the matter from either party.

Zenly will function as an independent unit, added the report. The app is widely popular among teens who like to keep up with their friends. Citing Sensor Tower, Tech Crunch further states that the app boasts of 4 million downloads with considerable downloads in Asian countries like South Korea and Japan.

Snapchat is looking for ways to boost user base as its rivalry with Instagram heats up. Recently, Instagram’s feature, Instagram Stories – a blatant rip off of Snapchat feature – was reported to have 250 million users, with 50 million being added only in the last two months.

On the other hand, Snapchat’s total daily active users (DAUs) stand at 166 million. Notably, it added only 5 million DAUs in fourth-quarter 2016 as well as last quarter, which happens to be the lowest since third-quarter 2014. User growth holds the key to attracting advertisers, which is the primary source of revenues for Snap. A slowdown in user base growth rate may look unattractive to advertisers.

Snap, after a strong IPO debut, has failed to keep the momentum going. This has polarized Wall Street’s opinion of the stock, with the majority having cautious sentiments. Interestingly, analysts have related the slowdown in Snapchat’s user growth to the popularity of Instagram Stories.

Meanwhile, Snap is trying hard to win over both users and investors. It has been hawk eyed on boosting the TV-style content on its platform. The company has inked deals with Walt Disney’s (DIS) ABC Network, Comcast’s NBC Universal, Vice Media, BBC and more. Recently, it inked a $100 million content deal with Time Warner Inc (TWX) to create 10 shows for its platform across various genres.

Also, in order to woo advertisers, it recently acquired Placed, a start up specializing in measuring success of digital ad campaigns.

Zacks Rank & Share Price Movement

At present, Snap carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Since Mar 2, the company’s shares declined 29.5% against the Zacks Internet Software industry’s gain of 9.9%.

Stocks to Consider

Some better-ranked stocks in the broader tech space include TiVo Corp , and MercadoLibre (MELI - Free Report) and Ollie's Bargain Outlet Holdings (OLLI - Free Report) . While TiVo and MercadoLibre sport a Zacks Rank #1, Ollie’s carries a Zacks Rank #2 (Buy).

In the trailing four quarters, TiVo, MercadoLibreand Ollie’s delivered average positive earnings surprises of 67.6%, 26.7%, and 14.6% respectively.

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